Global crude oil prices recorded a significant increase on Tuesday as renewed tensions between the United States and Iran heightened concerns over possible disruptions to energy supplies through the strategic Strait of Hormuz.
Brent crude futures rose by 4.19 per cent to $86.79 per barrel, marking the highest level recorded since June 12. The United States West Texas Intermediate (WTI) also gained 3.16 per cent, climbing to $80.61 per barrel.
The upward movement followed the reimposition of a US naval blockade of Iran and renewed hostilities between Washington and Tehran, which triggered fresh worries among investors over the stability of global oil flows.
The Strait of Hormuz, a key shipping route through which a significant portion of the world’s oil supply passes, has remained a major focus of market concerns due to its strategic importance to global energy security.
On July 12, Iran announced the closure of the Strait after its forces fired a naval cruise missile at a vessel it accused of travelling through an unauthorised route. The development intensified fears that further disruptions in the region could affect crude oil availability and push prices higher.
The latest increase comes about a month after international crude oil prices declined to around $82 per barrel following a deal involving the United States, Israel and Iran aimed at ending the Middle East conflict on multiple fronts, including Lebanon, while also reopening the critical shipping route.
The earlier decline in global oil prices had prompted concerns in Nigeria over the response of petroleum marketers to changing international market conditions.
Following the drop in crude prices, the Federal Competition and Consumer Protection Commission (FCCPC) criticised oil marketers for not adequately reflecting the benefits of lower global crude prices in domestic fuel pump prices.
The commission argued that the reductions recorded at filling stations did not match the scale of the decline in international crude oil prices, raising questions about pricing transparency in the downstream petroleum sector.
A day later, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the Federal Government was engaging oil marketers and industry regulators to ensure that changes in global crude oil prices are more transparently reflected in local petroleum product prices.
On July 10, the government also brought together key stakeholders in the oil and gas sector to deliberate on fair pricing mechanisms for petroleum products across the country.
The latest rise in crude prices could renew concerns over domestic fuel costs, particularly in oil-importing markets, as policymakers continue efforts to balance global market realities with consumer protection.