Oil jumps 4% to $79 per barrel as US-Iran tensions escalate

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By Obas Esiedesa, Abuja

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Global oil prices climbed by more than four per cent on Monday, with Brent crude rising to about $79 per barrel, as renewed hostilities between the United States and Iran heightened concerns over disruptions to global crude supplies.

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The price rally followed fresh military exchanges between the two countries and Iran’s announcement that it was closing the Strait of Hormuz, one of the world’s most strategic oil shipping routes through which about one-fifth of global crude supplies pass.

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Although United States President Donald Trump insisted the waterway would remain open, he announced plans to reinstate a blockade on Iranian ports, saying Iranian ships and their customers would be prevented from entering or leaving the ports, while vessels from other countries would be allowed access subject to a 20 per cent cargo charge.

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The renewed tensions have reignited fears of supply disruptions, triggering fresh volatility in the global oil market. Despite Monday’s rally, Brent crude remains below the higher levels recorded earlier this year.

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The latest surge marks a sharp reversal from the downward trend seen in recent weeks, when easing geopolitical tensions, higher output from OPEC+ producers and concerns over slowing global demand pushed prices lower.

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As recently as last week, Brent crude traded around $72 per barrel before rebounding to about $79 per barrel on Monday.

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The price increase comes as Nigeria continues to strengthen its crude oil production, raising the prospect of higher export earnings if the rally is sustained.

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According to data released on Sunday by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s average daily crude oil and condensate production rose by 2.3 per cent to 1.74 million barrels per day (mbpd) in June, up from 1.70 mbpd recorded in May.

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Average crude oil production, excluding condensates, increased to 1.56 mbpd from 1.53 mbpd in May, enabling Nigeria to exceed its 1.5 mbpd Organisation of the Petroleum Exporting Countries (OPEC) production quota for the second consecutive month.

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The June output represents 104 per cent of Nigeria’s OPEC quota and marks the country’s highest crude oil production level since April 2020.

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According to the NUPRC, combined crude oil and condensate production averaged 1,735,398 barrels per day during the month, extending Nigeria’s production growth streak to a fourth consecutive month.

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The commission attributed the improved performance to stable production across most producing assets, minimal pipeline disruptions and improved crude evacuation efficiency, adding that scheduled maintenance activities were completed without significantly affecting national output.

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The regulator also disclosed that Nigeria’s production peaked at 1.89 mbpd during June, while the lowest daily output stood at 1.57 mbpd, underscoring the country’s growing capacity to achieve its target of producing two million barrels per day.

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