Global crude oil prices rose sharply on yesterday after renewed hostilities in the Middle East heightened fears of prolonged supply disruptions through the Strait of Hormuz, a development that could boost Nigeria’s oil earnings while increasing the risk of higher domestic petrol prices.

Brent crude futures surged by about four per cent, trading above $80 per barrel, the highest level in more than three weeks, while the U.S. benchmark, West Texas Intermediate (WTI), climbed 4.13 per cent to $74.36 per barrel as investors reacted to escalating geopolitical tensions.

The latest rally followed fresh United States military strikes on Iran over the weekend and retaliatory missile attacks by Iran targeting U.S. allies, including Bahrain, Kuwait, Qatar, Jordan and Oman.

The renewed conflict has also reignited uncertainty over shipping through the Strait of Hormuz, one of the world’s most critical oil transit routes.

Iran claimed during the weekend that the strategic waterway had been closed to traffic, although the United States maintained that the passage remained open.

Nonetheless, concerns over maritime security have significantly reduced tanker movements through the corridor.

Some analysts at ANZ said hopes of a quick de-escalation had diminished following the latest exchanges, while commodities strategists at ING warned that the conflict risks spreading to neighbouring countries and critical energy infrastructure, potentially tightening global oil supplies during the third quarter.

Shipping data showed tanker traffic through the Strait of Hormuz fell to its lowest level in five weeks on Sunday, with only six vessels tracked through the passage.

Reports on Monday also indicated no visible oil or liquefied natural gas tankers attempting to transit the route, showing growing concerns among shipowners over safety.

For Nigeria, Africa’s largest crude producer, the surge in oil prices presents a mixed outlook as higher crude prices are expected to strengthen government revenues, improve foreign exchange inflows and provide additional support for the naira, particularly as the country’s crude oil production has recently climbed to levels last recorded about six years ago.

The improved production, combined with stronger international prices, could significantly enhance fiscal receipts and boost the country’s external reserves if sustained.

However, the gains may come at a cost for consumers. Nigeria remains partly dependent on imported petroleum products despite increased local refining capacity, meaning higher international crude prices could translate into fresh increases in the pump price of Premium Motor Spirit (petrol).

Meanwhile, Asia-Pacific’s liquefied natural gas (LNG) demand is projected to decline for a second consecutive year as escalating conflict in the Middle East tightens global supply and drives spot prices to levels that are forcing importers to cut purchases, switch to alternative fuels and diversify supply sources.

A new forecast by Wood Mackenzie estimates regional LNG demand will fall to 257 million tonnes (Mt) in 2026, down from 268 Mt in 2025 and a peak of 278 Mt in 2024.

The consultancy said the latest disruption has exposed significant differences in the resilience of Asian buyers, depending on their long-term supply contracts and ability to switch to alternative fuels.

Principal Analyst for Gas and LNG at Wood Mackenzie, said Maoping Hu said a tighter global LNG market is doing what it always does. “It separates buyers with contracted cover and fuel-switching options from those without,” Hu said.

According to the report, Japan and China are better insulated from the supply shock due to extensive long-term contracts and diversified import portfolios. In contrast, South Asian countries, particularly India, Pakistan and Bangladesh, are bearing the brunt of soaring prices, with industries reducing gas consumption, switching to oil-based fuels and, in some cases, shutting fertiliser plants and rationing electricity.

India faces the largest supply exposure in South Asia, with potential disruptions of up to 1.5 million tonnes per month, while Thailand remains Southeast Asia’s most vulnerable LNG importer because of its heavy reliance on spot purchases.

Despite the near-term slowdown, Wood Mackenzie expects Asia-Pacific LNG demand to recover to 279 Mt in 2027 and 297 Mt by 2028, supported by easing geopolitical tensions, new regasification infrastructure and renewed demand growth across South and Southeast Asia. The consultancy, however, warned that supply security will remain a critical concern even after markets stabilise.