Oil prices surged over a dollar in early trading today amid rising concerns about potential disruptions to crude production due to escalating tensions in the Middle East, particularly following Iran’s significant military strike against Israel.
Brent futures increased by $1, or 1.36%, reaching $74.56 per barrel, while U.S. West Texas Intermediate (WTI) crude rose by $1.07, or 1.53%, to $70.90 as of 03:30 GMT.
Both benchmarks had gained over 5% in trading on Tuesday.
On Tuesday, oil prices had already risen by about 3% after Iran launched ballistic missiles at Israel in response to Israel’s military actions against Hezbollah in Lebanon.
Brent futures climbed by $1.86, or 2.6%, closing at $73.56 per barrel, while WTI crude settled at $69.83, up $1.66 or 2.4%. Earlier in the day, both benchmarks had spiked over 5%.
Alarms were triggered throughout Israel, and explosions were heard in Jerusalem and the Jordan River valley as residents sought safety in bomb shelters.
Iran stated that the strikes were a response to attacks on Gaza and Lebanon, as well as the recent assassinations of leaders from Hamas, Hezbollah, and the Islamic Revolutionary Guard Corps. The country also warned Israel against any form of retaliation.
Iran’s direct involvement in the conflict, as an OPEC member, raises concerns about potential disruptions to oil supply. The country’s oil production hit a six-year high of 3.7 million barrels per day in August, representing approximately 4% of global supply.
A panel of ministers from OPEC and its allies, known as OPEC+, is scheduled to meet later on Wednesday to review the market, though no policy changes are anticipated.
Beginning in December, OPEC+ plans to increase output by 180,000 barrels per day (bpd) each month.
Rising oil prices are a positive sign for Nigeria’s fiscal position, indicating increased government revenue and the potential for a rise in the country’s foreign reserves.
