GLOBAL oil prices jumped over 7 per cent for the first time in over four months on Friday, June 13, after an Israeli attack on Iran.
Brent crude, the global oil benchmark, rose by 7.92 per cent to $74.85 a barrel at 2.00 West Africa Time (WAT), from $69 a barrel the previous day.
This is the first time since January 2025 that crude oil prices have risen significantly.
Similarly, United States (US) West Texas Intermediate (WTI) crude increased by 8.2 per cent to $73.61.
It also marked its highest increase since January 21.
The rise occurred after Israel launched a barrage of strikes against oil-rich Iran, sparking Iranian retaliation and raising worries about a disruption in Middle East oil supplies.
The ICIR reported that Israel announced targeting Iran’s nuclear facilities, ballistic missile factories, and military commanders, as part of a prolonged operation to prevent Tehran from building an atomic weapon.
It also said Iran had promised a harsh retaliation for the attack.
According to Reuters, the National Iranian Oil Refining and Distribution Company confirmed that its oil refining and storage facilities remain undamaged and fully operational.
With oil prices reaching multi-month highs, the global commodity’s value is close to Nigeria’s 2025 budget benchmark of $75 per barrel.
The ICIR had reported that declining crude oil prices below the benchmark portend risk in the implementation of the 2025 budget.
This is even as analysts are concerned that declining crude oil prices could compel the government to explore alternative funding sources for the 2025 budget.
Reuters quoted an analyst at Saxo Bank, Ole Hansen, as saying that “no energy installations have been impacted by the Israeli strikes, so unless Iran decides to drag other nations, especially the U.S., into the conflict, the risk of a supply disruption remains low and should over time reduce the risk premium.”
There are also worries that Iran could pay a heavy price for the blockage of the Strait of Hormuz, which it and its neighbours rely on to ship oil to Asian markets.
Iran’s economy heavily relies on the free passage of goods and vessels through the seaway, as its oil exports are entirely sea-based. Finally, cutting off the Strait of Hormuz would be counterproductive to Iran’s relationship with its sole oil customer, China,” it also quoted analysts with JP Morgan as saying.
An economist and former deputy governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, noted that Israel’s attack against what it claims are Iran’s nuclear facilities raises the stakes in an already anarchical international society.
“It raises the question of whether this meets the test for preemptive self-defence in international law. That doctrine of customary international law establishes a right of a sovereign to launch a preemptive attack against another if the attacker believes it is under an “imminent” threat of being attacked by another,” Moghalu, who is the current President of the African School of Governance (ASG), commented on his X handle.