Global oil prices climbed sharply on Monday as escalating tensions in the Middle East triggered one of the most significant supply disruptions in recent years.
Data monitored across major commodity markets showed Brent crude oil, against which Nigerian crude is priced, trading between $111 and $113 per barrel, while West Texas Intermediate (WTI) hovered near $100.
The latest rally is largely attributed to the ongoing conflict involving the United States, Israel and Iran, which has disrupted key supply routes and raised fears over the stability of oil shipments through the Strait of Hormuz, a strategic chokepoint responsible for nearly a fifth of global oil flows.
Industry analysts estimate that the conflict has already removed between 11 million and 12 million barrels per day from global supply, a scale of disruption that surpasses previous crises including the 1970s oil embargo and the Russia-Ukraine war.
The magnitude of the supply shock has forced market participants to reassess short-term price expectations and risk exposure.
The International Energy Agency is currently consulting with member nations on the possibility of additional strategic petroleum reserve releases to stabilise the market.
The agency had previously coordinated the release of approximately 400 million barrels, representing about 20 percent of total emergency reserves, in an effort to cushion the impact of supply constraints.
However, analysts warn that such measures provide only temporary relief and are unlikely to offset prolonged disruptions if geopolitical tensions persist or escalate further.
Saudi Arabia has also contributed to the tightening market by reducing crude oil supply to Asia for a second consecutive month.
State oil giant Saudi Aramco reportedly cut exports from about 7.1 million barrels per day in February to approximately 4.35 million barrels per day in March, limiting availability for key consuming nations and reinforcing upward pressure on prices.
In response to rising crude costs, China has moved to cap domestic fuel price increases in a bid to shield consumers and contain inflation.
The government’s intervention highlights growing concern among major economies over the broader economic impact of sustained high energy prices.
Goldman Sachs has revised its oil price outlook upward, increasing its 2026 average Brent crude forecast to $85 per barrel from $77, while projecting short-term prices could average around $110 if current supply conditions persist.
The investment bank also warned that prices could spike to as high as $135 per barrel under a worst-case scenario involving further escalation and prolonged supply disruptions.
The surge in oil prices is expected to have mixed implications globally. While oil-producing countries such as Nigeria stand to benefit from increased export revenues and improved fiscal balances, oil-importing nations are likely to face higher fuel costs, currency pressures and elevated inflation.
Market participants are now closely monitoring developments in the Middle East, particularly the status of shipping routes and any potential diplomatic interventions that could ease tensions.
Analysts note that the current rally is largely driven by risk sentiment rather than underlying demand fundamentals, suggesting that prices could retreat quickly if the geopolitical situation stabilises.
