Nigerian Crude Hits $68 as Iran-Israel Tensions Lift Oil Prices

Samuel Mobolaji

Nigerian crude settled near $68 a barrel on Wednesday as geopolitical concerns surrounding Iran and Israel triggered a surge in global oil prices. The uptick followed reports that U.S. intelligence indicates Israel is preparing for a possible strike on Iranian nuclear facilities.

Brent crude climbed above $66 per barrel, and West Texas Intermediate briefly jumped by as much as 5 per cent before retreating.

Traders are turning increasingly bullish, expecting Nigerian crude to higher price on Thursday. Oil markets have remained volatile due to contradictory developments in U.S.-Iran nuclear negotiations.

While progress could reintroduce more barrels into an already oversupplied market, a potential Israeli attack would likely derail talks and exacerbate tensions in the Middle East, which supplies about one-third of the world’s crude oil. As long as diplomatic efforts stall, crude is expected to retain a risk premium.

The CNN report on Israeli plans also briefly boosted safe-haven currencies like the Swiss franc and Japanese yen, though those gains later faded. The U.S. Department of Defence and National Security Council declined to comment.

Israel has long debated whether to strike Iran’s nuclear infrastructure, with concerns around the extent of force necessary to significantly impair Tehran’s nuclear ambitions. Previous plans were shelved following President Joe Biden’s caution last year.

Meanwhile, OPEC and allies have moved to release stored oil into the market. U.S. shale output remains below its peak and is unlikely to scale sustainably at prices hovering around $50, according to the ConocoPhillips CEO. Iran’s Supreme Leader, Ali Khamenei, this week reiterated his scepticism about engaging in fresh talks with the U.S., dampening hopes for a diplomatic breakthrough.

Despite sanctions from the U.S., UK, and EU, Iran continues to export crude oil. Goldman Sachs reports that Iran has increased output by nearly one million barrels per day in recent years and has further capacity to expand.