Oil Climbs Above $78 as Geopolitical Tensions Return to Focus

Oil prices extended their rally on Thursday with Brent crude oil climbing above $78 per barrel as renewed geopolitical tensions in the Middle East reignited concerns over global energy supplies and the security of one of the world’s most important oil shipping routes.

Brent crude oil, the international benchmark for Nigerian crude oil, rose 1% to $78.88 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 1.01% to $74.37 a barrel in early trading after the United States launched fresh military strikes against Iran.

The move dampened expectations of a near-term easing of tensions and renewed concerns about the uninterrupted flow of crude through the Strait of Hormuz.

The latest advance followed a strong rally in the previous session, when both benchmark contracts settled at their highest levels in more than two weeks after renewed hostilities prompted traders to rebuild a geopolitical risk premium into oil prices.

Market sentiment shifted after the U.S. military announced additional strikes targeting Iranian positions, describing the operation as part of efforts to safeguard navigation through the Strait of Hormuz.

The strategic waterway handles roughly 20% of global oil shipments, making any disruption a significant concern for energy markets.

The renewed escalation has also prompted increased caution among shipping companies and insurers operating in the Gulf region. Some maritime insurers are reassessing coverage terms, while several shipping operators are reviewing vessel movements through the Strait amid heightened security risks.

The geopolitical developments have overshadowed recent expectations that higher production from the OPEC+ alliance would improve global supply.

Instead, traders are increasingly focused on the possibility that prolonged tensions could disrupt exports from the Middle East and tighten crude availability in international markets.

Analysts said oil prices are likely to remain highly volatile in the near term as investors monitor military developments, shipping activity and diplomatic efforts aimed at preventing a broader regional conflict. Any prolonged disruption to exports through the Strait of Hormuz could further strengthen prices despite expectations of additional supply from major oil-producing countries.

For oil-exporting economies such as Nigeria, firmer crude prices could support government revenues and foreign exchange earnings.

However, sustained increases in global oil prices may also raise the cost of refined petroleum imports and add to inflationary pressures in fuel-dependent economies.