Sopuruchi Onwuka

Nigerians should brace fuel price jumps as crude oil prices in the international market continues rise on the back of worsening military confrontations among parties and interests in the prevailing Iran war.

Oracle Intelligence reports that crude oil prices govern the prices of refinery products, and ongoing military campaign by the United States and Israel to denuclearize Iran has triggered upswing in crude oil prices.

Market sentiment worsened after President Donald Trump declared that the United States would accept no agreement with Iran except for “unconditional surrender,” a statement that analysts say further rattled global energy markets.

Production cuts have already begun across the Gulf as exporters struggle with storage constraints and shipping disruptions.

Iraq shut down operations at the West Qurna-2 oil field and the Rumaila oil field earlier in the week after tankers stopped loading crude.

In neighboring Kuwait, the state-owned Kuwait Petroleum Corporation has started reducing production at several fields as storage tanks rapidly fill up. The country has also shut down the 464,000-barrel-per-day Mina Abdullah Refinery.

Shipping disruptions worsened after insurers stopped covering tankers transiting the Strait of Hormuz. The decision effectively froze exports from several Gulf producers, despite an offer from Washington that U.S. Marines would escort vessels through the waterway.

The disruption has begun to ripple through major energy-importing nations in Asia.

In Japan, refiners have urged the government to release crude from the nation’s strategic petroleum reserves. Japan depends on the Middle East for roughly 95% of its crude oil imports.

Meanwhile, China’s top economic planner, the National Development and Reform Commission, has suspended fuel export quotas for April 2026. Authorities have instructed domestic refiners and traders to prioritize supplies for the local market as the closure of the Strait of Hormuz tightens crude availability across Asia.

In the United States, where the immediate concern is rising fuel costs, officials have begun discussing possible steps to stabilize fuel prices.

Sources within the United States Department of the Treasury suggested that measures involving the oil futures market were under consideration. However, administration officials later said no decision had been made and the plans had not been implemented.

U.S. media outlets subsequently reported that the administration is currently ruling out direct Treasury intervention in oil futures trading.

Instead, the Trump administration is emphasizing maritime security and has proposed providing U.S. naval protection for tankers willing to pass through the Strait of Hormuz.

According to ship-tracking data monitored by Oracle’s intelligence platform, there have been no confirmed crude shipments leaving the Gulf since March 1 as dozens of tankers remain anchored offshore with cargoes on board while operators await a resolution to the crisis.

At the same time, freight costs for large tankers have surged.

Rates for Very Large Crude Carriers traveling from the Middle East to northeast Asia have climbed to the equivalent of about $16 per barrel. That cost now represents roughly 20% of the free-on-board value of many crude grades, adding further pressure to already rising oil prices.

Analysts warn that if the disruption continues, oil prices could climb significantly higher as global inventories tighten and supply routes remain blocked.

Survey of commodity prices by Oracle Intelligence on Friday showed that global oil prices surged to new heights barrel as the closure of the Strait of Hormuz halted crude flows from the Gulf and forced producers in the region to cut output.

The benchmark Brent crude climbed past $90 per barrel on the Intercontinental Exchange
(ICE) of London for the first time since April 2024.

Domestic fuel producer, Dangote Refinery, served a subtle price alert on Thursday, warning the public retail prices for its products might fall vulnerable to global price movements associated with the war in the middle east.

Oracle Intelligence reports that whereas economic jurisdictions across the globe are responding to impact of the Iran war, Nigeria and most African countries surrender their domestic fuel markets to the vagaries of global market forces.

Dangote Refinery stated in a media release that it buys its crude oil feedstock at full market value either in Naira or in dollars and should therefore maintain price floor for its products.