Oil Prices Cross $100 as Middle East Conflict Threatens Global Supply

Crude oil prices climbed above $100 per barrel on Friday as escalating conflict in the Middle East intensified concerns about the security of major shipping routes and the availability of global supplies.

Brent crude oil, the international benchmark for Nigerian crude oil, traded around $101.06 per barrel after recording a sharp increase in the previous session, while U.S. West Texas Intermediate (WTI) crude stood near $91.20 per barrel.

Brent was heading for a weekly gain of approximately 14.6 percent with WTI on course to rise by 11.8 percent. Both benchmarks were positioned to record a fourth consecutive weekly advance.

The latest rally followed attacks on Saudi oil tankers in the Red Sea and threats of further disruptions to vessels carrying crude and petroleum products from the region.

Iran-aligned Houthi forces announced a naval blockade targeting Saudi Arabia, raising the possibility that shipping companies could avoid affected waters, suspend operations or demand higher insurance premiums.

Traffic through the Strait of Hormuz has also declined significantly as the confrontation involving the United States, Israel and Iran continues.

The waterway is one of the world’s most important energy corridors, connecting major producers in the Persian Gulf with international markets. Any prolonged restriction would affect exports from Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Iraq and Iran.

The growing threat to the Red Sea creates an additional supply concern. Disruptions around the Bab el-Mandeb Strait could force vessels to travel around southern Africa, extending delivery times and raising freight costs.

Oil traders are therefore pricing in risks to two important maritime routes at the same time. Even without a complete shutdown, reduced vessel traffic and higher transportation expenses could tighten prompt supply and increase the cost of refined products.

Supply concerns were compounded by lower production in Kazakhstan following attacks on its principal Black Sea export infrastructure.

Operations at the Caspian Pipeline Consortium terminal were suspended, while output at Kazakhstan’s largest oilfield was reportedly reduced by more than half.

The route handles approximately 2 percent of global crude supply, making an extended interruption significant for the physical market.

The rally is likely to intensify inflation concerns across oil-importing economies. Higher crude prices increase the cost of petrol, diesel, aviation fuel, manufacturing and transportation, potentially delaying interest-rate reductions by major central banks.

For Nigeria, prices above $100 could strengthen crude export receipts, government revenue and foreign-exchange inflows if the country maintains production volumes.

However, the benefit may be partly offset by higher fuel-import and logistics costs. Rising international petroleum prices could also increase subsidy-related pressures or push domestic fuel prices higher, depending on exchange rates and the government’s pricing framework.

The Central Bank of Nigeria recently retained its benchmark interest rate at 26.5 percent, citing the inflationary risk from renewed Middle East hostilities.

A sustained oil-price surge would reinforce the CBN’s cautious position and could delay the start of monetary easing.

The immediate direction of crude prices will depend on whether attacks on energy infrastructure and vessels intensify, as well as the ability of producers to maintain exports through alternative routes.