Global oil prices climbed sharply on Wednesday, gaining close to 4% as renewed military activity in the Middle East raised concerns about disruption to crucial shipping routes. The jump quickly fed into expectations of higher energy costs beyond international benchmarks, with Nigeria’s domestic fuel market moving upward amid uncertainty around the Dangote Refinery’s next steps for dollar-denominated petrol sales.
Oil prices rise on shipping risks
- Brent crude futures rose 3.75% to $94.42 per barrel.
- West Texas Intermediate (WTI) increased 3.55% to $87.33 per barrel.
- The rally was linked to escalating threats to maritime traffic at two major chokepoints in the region: the Strait of Hormuz and the Bab el-Mandeb Strait.
- Reports circulated that Iran-aligned Houthis may attempt to close the Bab el-Mandeb Strait.
- A closure scenario would be expected to disrupt supplies moving out of the Saudi port of Yanbu on the Red Sea.
- Energy price shocks typically flow through to domestic fuel and electricity pricing, raising broader inflation and cost-of-living concerns.
Nigeria fuel prices continue to climb
In Nigeria, fuel prices have kept edging higher as traders weigh when the Dangote Refinery will resume petrol sales priced in dollars. The pump price in Abuja has risen from levels as low as N1,155 per litre to N1,350 per litre by the time of reporting.
The increase followed an earlier adjustment by the Nigerian National Petroleum Company Limited (NNPCL). NNPCL raised its pump price to N1,270 per litre from N1,155 per litre.
Even before NNPCL’s latest hike, depot operators and fuel marketers had already lifted their ex-depot and retail pricing to the range of N1,280 to N1,350 per litre across Lagos and Abuja.
