Brent crude oil has staged a recovery in early trading today, as geopolitical tensions in the Middle East rise. Brent future contracts for September went up by $1.00 (1.36%) to $74.56 a barrel. U.S. West Texas Intermediary (WTI) crude spiked by $1.07 (1.53%) to $70.90 as of 03:30 GMT.
This surge follows Iran’s launch of ballistic missiles against Israel, raising fears over potential disruptions to crude production. On Tuesday, oil prices soared 3% where Brent futures hiked by $1.86 (2.6%), going up to $73.56 a barrel and WTI crude also went up by $1.66 (2.4%), reaching $69.83.
The Iranian strike was said to be a response to Israel’s attacks on Hezbollah positions and the assassination of top Hamas, Hezbollah, and IRGC members. Israeli authorities have vowed “resolute” responses.
Iran’s role takes added urgency, given potential threats to oil exports. The country’s production of crude oil in the month of August hit 3.7 million barrels per day, the highest in six years and making up approximately four percent of the global supply.
Later today, OPEC+ dignitaries will convene a market meeting, with no policy changes expected. OPEC+ will implement an additional 180,000 barrels per day supply from December.
In response to the crisis, president Yoon Sook-yeol of South Korea raised issues regarding the country’s energy supply and called for action since the effects could be catastrophic.
For Nigeria, rising oil prices mean increased revenue and foreign reserves. However, with the NNPC’s cost-reflective petrol pricing era, higher crude oil prices may lead to higher petrol prices, worsening the current situation where petrol sells for over N1,000 per liter in major cities.
