Global oil prices climbed to $100 per barrel on Thursday for the first time since May after attacks by Iran-backed Houthi militants on Saudi oil tankers in the Red Sea heightened fears of supply disruptions and renewed inflationary pressures.
Brent crude, Nigeria’s oil benchmark, rose by more than six per cent, extending a strong rally driven by concerns that tensions between the United States and Iran could escalate into a wider conflict.
The price surge followed claims by the Houthis that they had attacked two Saudi Arabian oil tankers after announcing a maritime blockade against the kingdom earlier this week.
The attacks have raised concerns over the security of the Bab al-Mandab Strait, a critical shipping route linking the Red Sea to the Gulf of Aden and the Indian Ocean. The waterway has become increasingly important for Saudi Arabia’s oil exports following Iran’s control of the Strait of Hormuz during the early stages of the conflict.
Analysts also warned that the latest attacks could jeopardise the four-year ceasefire between Saudi Arabia and the Houthi movement, further increasing risks to global energy supplies.
Brent crude last traded at the $100 mark on May 26 before prices fell in June after the United States and Iran agreed to extend a ceasefire and reopen key shipping routes, easing concerns over oil exports.
However, the ceasefire has since collapsed, with US and Iranian forces exchanging fire over the past two weeks.
US President Donald Trump warned that both the Houthis and Iran would face “major military punishment” if attacks on commercial shipping continued.
The Houthis, regarded as one of Iran’s strongest regional allies, have largely stayed on the sidelines of the broader conflict, aside from launching missile and drone attacks against Israel earlier this year. However, concerns are growing that the group could coordinate with Tehran to disrupt maritime traffic through the Bab al-Mandab Strait, further tightening global oil supplies.
US Secretary of State Marco Rubio also indicated that diplomatic efforts had stalled, saying Iranian leaders were “not ready to make a deal.”
The renewed surge in oil prices has heightened fears of another wave of global inflation, as higher crude prices typically translate into increased fuel costs and higher transportation expenses.
For Nigeria and other oil-importing economies, rising energy prices could push up the cost of petrol, diesel and other essential goods, with businesses likely to pass increased transportation costs on to consumers.
