By Fatimah Idera
Oil prices have spiked by one dollar in early trading as of today amid growing concerns and tensions in the Middle East which could disrupt crude production, following Iran’s most significant military strike against Israel.
The Brent futures rose by $1, or 1.36%, to $74.56 per barrel, while U.S. West Texas Intermediate (WTI) crude increased by $1.07, or 1.53%, to $70.90 as of 03:30 GMT. On Tuesday, both benchmarks saw gains of over 5% during trading.
As at yesterday, oil prices rose by about 3% following Iran’s launch of ballistic missiles at Israel in response to Israel’s military operations against Hezbollah, Tehran’s ally in Lebanon. Brent futures increased by $1.86, or 2.6%, closing at $73.56 per barrel, while U.S. West Texas Intermediate (WTI) crude climbed $1.66, or 2.4%, to settle at $69.83. Earlier in the day, both benchmarks had spiked over 5%.
Alarms were raised throughout Israel, and explosions were heard in Jerusalem and the Jordan River valley as residents sought safety in bomb shelters.
Recall that the Iran and Isreal’s conflict began when the former stated that the rocket strikes were carried out in retaliation for attacks on Gaza and Lebanon, as well as the recent assassinations of leaders from Hamas, Hezbollah, and the Islamic Revolutionary Guard Corps (IRGC). The country also issued a warning to Israel against any form of retaliation.
However, Israeli officials have vowed to retaliate following Iran’s launch of a barrage of ballistic missiles targeting key military and security in sites in Israel.
On the contrary, rising oil prices will come as a positive sign to Nigeria’s fiscal position as it signals increased revenue for government and potential rise in the country’s foreign reserves.
With the intent of the NNPC to full transition into a cost-reflective petrol market era, higher crude oil prices would translate to higher petrol prices which could come as a blow to Nigerians who are already battling record level petrol prices at over N1,000 per litre in major cities across the country.
About The Author
