Oil price jumps 14% to $84 per barrel as US-Iran ceasefire collapses

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By Obas Esiedesa, Abuja

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Global oil prices surged by 14 per cent to almost $85 per barrel yesterday as the escalating conflict between the United States and Iran intensified fears of prolonged disruptions to global crude supplies.

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Brent crude, the international benchmark, climbed to $84.37 per barrel, up from $76.01 on Sunday, extending a sharp rally that began on Monday, driven by renewed military hostilities between the US and Iran, and growing concerns over the security of crude exports from the Middle East.

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The latest increase follows the exchange of fresh attacks between the United States and Iran from Saturday till yesterday, while Tehran announced the closure of 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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The price rally was also fueled by uncertainty over the United States’ trade and sanctions measures. In a post on his Truth Social platform on Tuesday, US President Donald Trump said he had decided to replace the proposed 20 per cent United States reimbursement fee with trade and investment agreements involving Gulf States

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Trump said the various Gulf States would instead make “massive” investments in the United States, adding that the arrangements would be “extraordinarily good for them, and their future.”

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Earlier, Trump had threatened to impose restrictions on Iranian ports while allowing vessels from other countries to continue operations, subject to the proposed cargo charge, a move that heightened concerns over global oil trade and supply chains.

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The latest rally marks a dramatic reversal of the downward trend recorded in recent weeks. Brent crude had weakened amid easing geopolitical tensions in the Middle East, increased production by OPEC+ members, and concerns over slowing global demand, falling to around $72 per barrel last week before rebounding to $76 on Sunday and almost $85 on yesterday.

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Market analyst Olufemi Idowu, Partner at Kreston Pedabo, said the renewed conflict has restored a significant geopolitical risk premium to crude prices, with investors closely monitoring developments around the Strait of Hormuz and the potential impact of further sanctions and military action on global energy markets.

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“I do not expect any major upward review in the local pump price of petrol because oil prices are still significantly lower than the level we had during the war,” he noted.

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For Nigeria, the sharp rise in crude prices comes as the country records its strongest oil production performance in more than six years, raising expectations of higher export earnings, stronger foreign exchange inflows and improved government revenues if the current price rally is sustained.

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Data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that 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 from 1.70mbpd in May.

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