Global crude oil prices surged on Wednesday following reports that Israel may be preparing to launch military strikes on Iranian nuclear facilities, triggering renewed concerns about potential supply disruptions across the Middle East.
Brent crude oil, against which Nigerian oil is priced, advanced by 79 cents or 1.2% to $66.17 per barrel as of 11:18 a.m. in Nigeria while U.S. West Texas Intermediate (WTI) crude rose by 82 cents or 1.3% to settle at $62.85.
The price rally was driven by heightened geopolitical risk and fears that any escalation between Israel and Iran could threaten oil output and transit routes vital to global energy flows.
According to a CNN report citing multiple U.S. intelligence sources, Israeli officials are assessing options to strike Iranian nuclear sites. While a final decision has not been confirmed, the prospect of a targeted military operation has intensified investor concerns over regional stability.
ING commodity strategists stated that “such an escalation would not only put Iranian supply at risk, but also affect crude flows from large parts of the broader region.”
Iran currently exports over 1.5 million barrels per day (bpd) and ranks as the third-largest producer within the Organization of the Petroleum Exporting Countries (OPEC).
UBS analyst Giovanni Staunovo noted that the market’s reaction reflects expectations that any disruption to Iran’s crude output or retaliation targeting the Strait of Hormuz could have material implications for global supply.
The Strait of Hormuz, a critical chokepoint through which approximately 20% of global oil passes, is a strategic transit route for Saudi Arabia, Iraq, Kuwait and the United Arab Emirates.
Any obstruction in this corridor would likely result in price volatility and logistical constraints across international markets.
Meanwhile, diplomatic efforts between the United States and Iran over Tehran’s nuclear program remain stalled. Recent public statements from both Washington and Iranian Supreme Leader Ayatollah Ali Khamenei suggest limited progress and growing skepticism around the possibility of a resolution.
In parallel, American Petroleum Institute (API) data released late Tuesday indicated a rise in U.S. crude stockpiles last week, while gasoline and distillate inventories declined. Official figures from the U.S. Energy Information Administration (EIA) are expected to provide further insight into domestic inventory dynamics later on Wednesday.
Despite rising prices, production from some non-OPEC producers has remained resilient. Kazakhstan’s oil output reportedly increased by 2% in May, according to an industry source, signaling continued divergence from OPEC+ output restraint targets.
Market analysts expect geopolitical risk premiums to remain elevated in the short term as participants monitor developments in the Middle East.
Investors are also likely to factor in central bank policies, U.S. economic data, and global demand indicators in shaping crude price forecasts.
With volatility on the rise, the oil market continues to reflect the delicate balance between physical supply fundamentals and escalating geopolitical risk factors.
