Rising US-Iran tensions are driving global crude oil prices above $80, potentially pushing petrol prices in Nigeria to N1,000 per litre.

Global crude oil prices are poised to rise beyond $80 per barrel this week as tensions between the United States and Iran intensify. The oil market responded sharply to reports of coordinated US-Israeli airstrikes targeting key Iranian nuclear facilities.

In response, petroleum product marketers have warned that the price of petrol in Nigeria could soon climb to as much as N1,000 per litre, driven by the surge in crude oil prices and ongoing volatility in the foreign exchange market.

This follows what has been described as a “preemptive defensive strike”—a series of overnight attacks launched by the United States against three major Iranian nuclear sites. According to President Donald Trump, the airstrikes “obliterated” critical parts of Iran’s nuclear infrastructure, escalating an already tense situation in the Middle East. Iran, a major player in OPEC and the third-largest crude producer in the group, has vowed to defend itself.

In retaliation, the Iranian parliament reportedly moved to close the Strait of Hormuz, a crucial shipping lane through which nearly 20% of the world’s oil supply flows. The move triggered immediate reactions in global energy markets, with Brent crude prices climbing in early trading and analysts predicting further increases.

On Sunday, energy experts cautioned that the rising price of Brent crude could push the pump price of Premium Motor Spirit (petrol) in Nigeria to N1,000 per litre in the coming weeks if the $80 per barrel threshold is breached. Olatide Jeremiah, CEO of PetroleumPrice.ng, indicated that private depots are already planning to raise loading costs starting Monday.

“Given the current market trends, private depots are likely to raise petrol prices to N1,000 in the next few days. If crude prices hit or exceed $80 by tomorrow, depot prices will spike, and consumers will feel the impact,” Jeremiah stated. He added that this could create an opportunity for profiteering, but the continued sale of petrol by Dangote at current prices might stabilize the situation. “Last week’s surge was due to Dangote halting sales for a few days. Now that they’ve reopened their portal and resumed sales at N880 for two million litres, we hope this brings some relief,” he said.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has also raised concerns over the impact of the Israel-Iran conflict on crude oil prices, noting that it has caused a ripple effect on global petrol pricing. On Friday, the Dangote refinery increased its petrol price from N825 to N880 per litre. Following this move, MRS Oil Nigeria and other filling stations selling Dangote fuel raised their pump prices to an average of N955 per litre in the South East and North West.

A correspondent observed on Sunday that several other filling stations had also adjusted their prices, now selling between N930 and N960 per litre, depending on the region. Lagos had the lowest prices, with MRS and other Dangote partners selling petrol at N925 per litre on Sunday.

Speaking with The PUNCH on Sunday, IPMAN’s National Publicity Secretary, Chinedu Ukadike, attributed the recent price hike to instability in the global crude oil market due to the Israel-Iran crisis and fluctuations in the foreign exchange rate. He noted that Brent crude prices had risen from around $66 to $77 per barrel, and this has a direct effect on domestic petrol costs.

Ukadike explained that with increasing crude prices and a weakening naira, both locally refined and imported petrol become more expensive. He emphasized that Dangote and other importers have responded by raising their prices accordingly. “Once the exchange rate rises and crude oil prices go up, it affects product pricing across the board,” he said.

He also highlighted that the cost of lifting 50,000 litres of petrol has risen substantially, putting additional financial pressure on independent marketers and forcing them to adjust their pricing strategies. “Marketers will have no choice but to increase their prices. Dangote has already adjusted, and so have importers. This means we’ll need more capital to purchase the same volume of fuel, and that impacts retail pricing,” he said.

Ukadike warned that in some areas, especially in the northern parts of the country, petrol could sell for up to N1,000 per litre due to high transportation and logistics costs. “We are already seeing prices like N980, N990, and N975 in some locations. It could easily reach N1,000,” he added.

He further explained that due to global crude volatility and domestic operational costs, it’s becoming increasingly difficult for marketers to stabilize pricing. He pointed out that Dangote refinery’s pricing is also influenced by international crude rates, which undermines expectations that locally refined fuel would be significantly cheaper than imports.

“Dangote is purchasing crude oil at global market rates, so the final product cost depends on what’s approved in the naira-for-crude arrangement by the presidential committee,” he said. Ukadike predicted that pump prices would likely range between N930 and N990 per litre, depending on location.

He also observed that in some areas, such as the South-South region, prices have risen to about N950 per litre due to logistics advantages, including the use of marine terminals. “Those using coastal routes to access fuel depots tend to sell at slightly lower costs since they source directly from vessels,” he noted.

Ukadike reiterated that petrol pricing is ultimately shaped by a combination of global crude prices, exchange rate fluctuations, and distribution costs. This aligns with earlier reports that importers had begun adjusting their prices in response to rising crude prices.

Nigeria’s key crude grades—Bonny Light, Brass River, and Qua Iboe—have all recorded price increases, hitting $79 per barrel last week and maintaining that level into the weekend. This came amid mounting fears of a broader Middle East conflict following Israel’s airstrikes on Iran. As of Sunday, data from Oilprice.com indicated Bonny Light was trading at $78.62 per barrel, with Brass River and Qua Iboe both close to $79. Brent crude stood at $77, while West Texas Intermediate (WTI) reached $73.84 per barrel.

These new benchmarks exceed the Federal Government’s 2025 budget assumption of $75 per barrel by about $3, which could provide short-term fiscal gains. However, analysts warn that rising crude costs will likely increase domestic fuel prices, as refiners grapple with more expensive feedstock.

Depots have already raised petrol prices since Monday, following the crude oil price spike driven by geopolitical tensions. The pump price rose from N825 to N840, and Rainoil adjusted its rate from N850 to N900 per litre. Fynefield and Mainland raised their ex-depot prices to N930 and N920, reflecting increases of N51 and N63 respectively.

As of Monday, Sigmund was selling at N920 per litre, Matrix Warri at N910, NIPCO at N895 (up from N827), and Aiteo at N840. Observations showed that SGR, which had been selling at N850, had revised its price to N930 per litre.

The Nigerian National Petroleum Company Limited (NNPC Ltd) is also expected to review its pump prices soon. Jorge Leon, head of geopolitical analysis at Rystad and a former OPEC official, told Reuters that the market should expect a jump in oil prices. “Even without immediate retaliation, markets will factor in a heightened geopolitical risk premium,” he said.

SEB analyst Ole Hvalbye predicted that Brent crude could rise by $3 to $5 per barrel when markets reopen. On Friday, Brent settled at $77.01, and WTI at $73.84 per barrel. Similarly, Ole Hansen of Saxo Bank noted that crude might open $4 to $5 higher, with possible repositioning by traders. Crude prices had dropped slightly on Friday after the United States imposed new sanctions related to Iran, including penalties on two Hong Kong-based entities and additional counter-terrorism-related sanctions announced by the US Treasury Department.

Since the conflict began on June 13, Brent has risen by 11% and WTI by about 10%, with Israel targeting Iranian nuclear sites and Iran responding with missile attacks on Tel Aviv. For now, stable supply and spare capacity from other OPEC members have somewhat capped oil price gains. Still, according to Giovanni Staunovo of UBS, risk premiums tend to ease only when supply disruptions are averted.