Nigeria’s flagship crude oil grades, including Bonny Light and Escravos Light, are reportedly trading close to the crucial $80 per barrel mark, driven by heightened geopolitical tensions stemming from the escalating conflict between Israel and Iran.

Brent crude futures jumped nearly 8 percent on Friday, reflecting growing worries about an escalation in conflict following Iran’s vow to respond to attacks by Israel.

This upward momentum has cascaded into pricing for Nigerian crude varieties, with both Brass River and Qua Iboe closing in on $80 per barrel.

According to data sourced from oilprice.com, Brass River is currently trading at $77.09 per barrel up $5.24 or 7.29 percent, while Qua Iboe stands at $77.14 per barrel, following a similar $5.24 or 7.29 percent rise.

This surge in prices, while offering a reprieve for Nigeria’s tight fiscal situation, underscores the volatile nature of the global oil market and the precariousness of a revenue stream heavily influenced by distant geopolitical events.

The recent uptick in prices for Nigerian crudes reflects a broader market reaction to fears of supply disruptions in the Middle East, a region pivotal to global oil production and transit.

Even without direct impacts on immediate supply, the mere threat of escalation in a major crude-producing hub like the Persian Gulf, especially concerning critical chokepoints like the Strait of Hormuz, is enough to inject a substantial risk premium into oil benchmarks.

As concerns mount over potential disruptions to tanker traffic or production facilities in the region, buyers naturally seek out alternative, more secure supplies from less volatile areas.

This scenario plays directly into Nigeria’s hands. Nigerian crude grades, particularly Bonny Light, are highly prized in international markets due to their light and sweet (low sulfur) characteristics.

These qualities make them easier and more economical for refiners to process into high-demand products such as gasoline, diesel, and jet fuel, aligning with stricter environmental regulations globally.

In times of geopolitical uncertainty in the Middle East, the demand for these “safer” barrels from the Atlantic Basin typically rises, pushing their prices higher relative to global benchmarks like Brent. (BusinessDay)