Nigerian crude oil grades and global benchmark Brent crude surged to their highest levels in about 10 days as escalating military tensions between the United States and Iran heightened fears of supply disruptions and renewed inflationary pressures in the global energy market.
Brent crude rose by nearly three per cent to trade above $90 per barrel following reports of fresh attacks on vessels attempting to transit the Strait of Hormuz, one of the world’s busiest oil shipping routes.
Nigeria’s premium light sweet crude grades—including Bonny Light, Qua Iboe and Forcados—were reported to be trading around $93 per barrel, maintaining strong physical premiums in the Atlantic Basin as European refiners increasingly turned to Nigerian supplies amid growing security concerns in the Middle East.
Shipping traffic through the Strait of Hormuz slowed significantly on Monday following several days of escalating hostilities between Washington and Tehran. Reports indicated that two vessels came under attack while navigating the strategic waterway, raising concerns over the safety of commercial shipping through the route, which handles a significant share of global crude exports.
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Data also showed that only a handful of vessels attempted to pass through the strait, with one Marshall Islands-flagged bulk carrier reportedly switching off its transponder as it exited the Persian Gulf. An LPG carrier linked to Iran’s so-called “dark fleet” was also seen approaching the waterway.
The latest developments followed another round of military exchanges between the United States and Iran. The U.S. Central Command (CENTCOM) said it carried out a ninth consecutive night of strikes targeting Iranian command centres, maritime infrastructure, missile facilities and drone launch sites.
According to the U.S. military, the operations were aimed at degrading Iran’s capability to launch attacks against commercial vessels navigating the Strait of Hormuz.
Speaking on Sunday, U.S. Secretary of State Marco Rubio said Iran continued to signal interest in negotiations while simultaneously carrying out attacks.
“Iran wants to negotiate but still attacks,” Rubio said, adding that there appeared to be divisions within the Iranian leadership between officials favouring diplomacy and hardliners pushing for continued confrontation.
He maintained that U.S. forces would continue targeting Iranian assets used to threaten international shipping.
Meanwhile, Kuwait also reported fresh fallout from the regional conflict after Kuwait Petroleum Corporation announced significant material losses at one of its oil facilities following an attack, prompting the evacuation of the site and leaving several people injured. Two electricity and water plants in the country were also reportedly hit.
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The heightened geopolitical risks have strengthened demand for Nigerian crude grades, which offer European buyers an alternative to Middle Eastern supplies because they are shipped directly across the Atlantic without passing through the Strait of Hormuz.
Industry observers say the premium attached to Nigerian crude has been supported not only by global supply concerns but also by improving domestic production.
According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the country’s crude oil production averaged 1.56 million barrels per day, the highest level recorded since April 2020.
Total liquids production, including condensates, averaged approximately 1.74 million barrels per day after four consecutive months of growth.
Bonny terminal remained Nigeria’s highest-producing export terminal with about 318,000 barrels per day, followed closely by Forcados at roughly 306,000 barrels daily.
Analysts attribute the production increase to improved security around oil infrastructure, resulting in longer pipeline uptime and the restoration of previously shut-in fields.
Domestic demand has also strengthened following the expansion of the Dangote Petroleum Refinery, which reportedly lifted about 40.4 million barrels of Nigerian crude—including Bonny Light, Forcados and Bonga grades—within the last 60 days to meet its refining requirements.
The increased local demand, combined with strong international buying interest, has continued to provide firm support for Nigerian crude prices even as producers seek to balance domestic supply obligations with lucrative export opportunities.