Middle East conflict: Oil prices could soar to $130, say analysts; fuel costs steady at N1,040 in Lagos, N1,080 in Abuja

Nigeria's downstream petroleum sector is bracing for potential turmoil as experts forecast a possible surge in crude oil prices to $130 per barrel if tensions between the United States and Iran intensify, thereby constricting global oil supply.

The ongoing conflict has already driven crude prices above $100 per barrel, up from approximately $85 per barrel, prompting a significant increase in the price of Premium Motor Spirit, or petrol, to over N1,000 per litre in various parts of Nigeria.

Industry experts, in separate interviews, cautioned that the US-Iran conflict may be far from over, suggesting that as long as the conflict persists, crude oil prices will continue to climb in the global market.

Olajide Jeremiah, Chief Executive Officer of petroleum.ng, noted that a swift resolution to the conflict is unlikely, citing the uncompromising stance of the two major parties involved, both of which are significant players in the global oil industry.

Jeremiah also highlighted the devastating impact of the escalating war on major oil and gas installations, which has inevitably disrupted operations.

Similarly, Colman Obasi, National President of the Oil and Gas Services Providers Association of Nigeria, expressed skepticism about the conflict ending soon, citing a lack of indication to that effect.

Obasi warned that the prolonged conflict would fuel speculation and drive oil prices higher.

JPMorgan Chase has projected that Brent crude could reach $120 per barrel if a full-scale Middle East conflict leads to a sustained disruption of oil flows through the Strait of Hormuz.

The price of petrol, which had initially spiked to as high as N1,100 per litre on Friday, has stabilized at N1,040 per litre in Lagos and N1,080 per litre in Abuja.

The development follows the Dangote Refinery's decision to increase its ex-gantry price of petrol to N995 per litre.

Checks revealed that at Nigerian National Petroleum Company Limited retail stations, petrol is being sold at N1,040 per litre, representing a N47 increase from the previous price of N993 per litre.

Emadeb Energy and PM Petroleum are also selling petrol at N1,040 per litre, according to observations.

In Abuja, petrol is selling for N1,050 per litre at Gegu Oil Nigeria, while Empire Energy is selling the product for N1,080 per litre.