Crude oil prices gained on Monday during the Asian trading session over possible supply disruption due to the ongoing fight between Israel and Iran-backed forces in the Middle East.
The Brent crude oil, against which Nigerian crude oil is priced, appreciated by 51 cents or 0.71% to $72.49 barrels at 3.30 am Nigerian time while the U.S West Texas Intermediate crude oil expanded by 43 cents or 0.63% to $68.61 a barrel.
The rise in oil prices was largely driven by the escalating tensions in the Middle East, involving Iran, a key crude oil producer and member of the Organization of the Petroleum Exporting Countries (OPEC).
On Saturday, Israel announced the killings of key members of Hezbollah backed by Iran and warned of further consequences despite Iran and other vested interests in the region saying there would be retaliation.
Israel on Sunday announced it bombed Houthi targets in Yemen to expand its confrontation with Iran’s allies two days after killing Sayyed Hassan Nasrallah, the leader of Hezbollah in Lebanon.
The uncertainty surrounding the fight bolstered oil sentiment as traders have started factoring in possible disruption that could dampen oil supplies from the region.
The U.S. on Sunday announced it was strengthening its presence in the Middle East, with the Pentagon saying that should Iran, its partners, or its proxies target U.S. personnel or interests, Washington “will take every necessary measure to defend our people”.