Global oil prices rose for a second consecutive session on Tuesday as concerns over supply disruptions in the Middle East continued to weigh on the market amid uncertainty over efforts to end the conflict involving the United States, Israel and Iran.
The stalled negotiations and renewed geopolitical tensions have heightened fears of prolonged disruptions to crude oil exports and shipping routes across the region, raising concerns about the recovery of global oil supplies despite expectations of a ceasefire.
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Brent crude futures rose by $1.49, or 1.4 per cent, to $106.77 per barrel by 0326 GMT, while US West Texas Intermediate (WTI) crude gained $1.34, or 1.5 per cent, to $93.94 per barrel, Reuters reported. Both benchmarks had also closed the previous session nearly $1 higher.
The sustained increase in crude prices underscores the market’s sensitivity to developments in the Middle East, with oil trading between approximately $104 and $108 per barrel amid persistent supply concerns and geopolitical uncertainty.
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For Nigeria and other African economies, the prolonged disruption poses significant economic risks, particularly as higher global crude and refined petroleum product prices feed into domestic energy costs, transportation expenses and inflation.
In Nigeria, rising international oil prices have coincided with increases in the prices of petrol, diesel and aviation fuel, intensifying pressure on households, businesses and the aviation industry.
The development has also heightened concerns over potential disruptions to air transport, as aviation workers’ unions continue to threaten industrial action over rising operating costs.
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Petrol prices in parts of Nigeria have climbed to nearly N1,500 per litre from between ₦1,200 and N1,300, following an earlier ceasefire agreement, reflecting renewed market uncertainty as negotiations falter.
The rising cost of fuel is expected to exert further pressure on transportation and food prices, worsening the cost-of-living challenges facing a significant proportion of Nigerian households.
Although the government has continued to roll out compressed natural gas (CNG) buses and other interventions aimed at reducing transportation costs, the sustained increase in fuel prices continues to pose challenges for businesses and consumers.
Tim Waterer, chief market analyst at KCM Trade, said the increase in crude exports from the Gulf had yet to translate into a full recovery in supply efficiency, as producers continued to rely on alternative shipping arrangements.
“A clearer picture is emerging of higher oil export volumes leaving the Gulf, but much of that increase still relies on workarounds such as ship-to-ship transfers,” Reuters quoted Mr Waterer as saying.
“Those methods are less efficient and more costly than normal operations, which is why crude prices remain elevated.”
Preliminary figures from data provider Kpler showed that crude exports from major Middle Eastern producers climbed to 12.8 million barrels per day in September, the highest level since February, supported by increased shipments from Saudi Arabia and the United Arab Emirates.
READ ALSO: CBN may need to sterilise FX inflows from increased oil prices to curtail inflation – IMF
Meanwhile, US and Iranian officials have held separate discussions with mediators in renewed efforts to end the seven-month conflict, officials from both countries said.
Further negotiations are expected to focus on an amended version of a seven-day proposal presented by Iran last week on the sidelines of the United Nations General Assembly.
However, uncertainty over the outcome of the diplomatic efforts continues to sustain concerns about global energy supplies and inflation.
“The dominant risk remains the US-Iran standoff and its implications for energy prices and inflation expectations,” analysts at United Overseas Bank (UOB) said in a client note.
In a related development, the United States is considering regulatory relief that would allow broader sales of red-dyed diesel to reduce fuel costs, Reuters reported, citing people familiar with the discussions.
The proposal, which could allow some buyers to avoid federal fuel taxes, has emerged as a leading alternative to a proposed ban on diesel exports following days of deliberations by US officials.
The measures reflect growing concerns among policymakers over the domestic economic consequences of elevated energy prices as geopolitical tensions continue to threaten the stability of global oil markets.
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