Trump’s Iran Blockade Pushes Oil to $80, Raises Shipping Costs

Global crude oil prices rose sharply yesterday after renewed hostilities in the Middle East heightened fears of prolonged supply disruptions through the Strait of Hormuz, a development that could boost Nigeria’s oil earnings while increasing the risk of higher domestic petrol prices.

The development followed President Donald Trump‘s statement yesterday that the United States would be paid to guard the Strait of Hormuz, as it would be “taking over” the strategic waterway.

Brent crude futures surged by about four per cent, trading above $80 per barrel, the highest in more than three weeks, while the U.S. benchmark, West Texas Intermediate (WTI), climbed 4.13 per cent to $74.36 per barrel as investors reacted to escalating geopolitical tensions.

The latest rally followed fresh U.S. military strikes on Iran over the weekend and retaliatory missile attacks by Iran targeting U.S. allies, including Bahrain, Kuwait, Qatar, Jordan and Oman.

The renewed conflict has also reignited uncertainty over shipping through the Strait of Hormuz, one of the world’s most critical oil transit routes.

Iran claimed, at the weekend, that the strategic waterway had been closed to traffic, although the U.S. maintained that the passage remained open.

Nonetheless, concerns over maritime security have significantly reduced tanker movements through the corridor.

Some analysts at ANZ said hopes of a quick de-escalation had diminished following the latest exchanges, while commodities strategists at ING warned that the conflict risks spreading to neighbouring countries and critical energy in
frastructure, potentially tightening global oil supplies in the third quarter.

Shipping data showed tanker traffic through the Strait of Hormuz fell to its lowest level in five weeks on Sunday, with only six vessels tracked through the passage.

Reports yesterday also indicated no visible oil or liquefied natural gas (LNG) tankers attempting to transit the route, showing growing concerns among ship-owners over safety.

For Nigeria, Africa’s largest crude producer, the surge in oil prices presents a mixed outlook as higher crude prices are expected to boost government revenues, improve foreign exchange inflows and provide additional support for the naira, particularly as the country’s crude oil production recently climbed to levels last recorded about six years ago.

However, the gains may come at a cost for consumers. Nigeria remains partly dependent on imported petroleum products despite increased local refining capacity, meaning higher international crude prices could translate into fresh increases in the pump price of Premium Motor Spirit (petrol).

Meanwhile, Asia-Pacific’s LNG demand is projected to decline for a second consecutive year as escalating conflict in the Middle East tightens global supply and drives spot prices to levels that are forcing importers to cut purchases, switch to alternative fuels and diversify supply sources.

A new forecast by Wood Mackenzie estimates that regional LNG demand will fall to 257 million tonnes in 2026, down from 268 million tonnes in 2025 and a peak of 278 million tonnes in 2024.

TRUMP told ‘Fox and Friends’: “We’ll become the guardian of the Strait,” adding that the U.S. had been guarding it for “nothing” but now would be reimbursed by wealthy nations. “We’re going to get paid for guarding it. A lot of money, but we just want to be reimbursed for doing all of this, for putting our people in danger.”

The U.S. President’s comments came after Uncle Sam and Iranian attacks on a scale unseen since an April ceasefire in the conflict in the Middle East, adding to doubts about efforts to bring a permanent end to the war that has halted shipping through the strait.