Oil Prices Surge 14% to $84 Per Barrel as US-Iran Conflict Escalates, Raising Global Supply Fears

Global oil prices have soared by 14% to nearly $85 per barrel following a sharp escalation in the conflict between the United States and Iran, triggering fresh concerns over disruptions to global crude oil supplies.

Brent crude, the international benchmark, climbed to $84.37 per barrel, up from $76.01 recorded on Sunday. The rally accelerated after renewed military exchanges between Washington and Tehran intensified fears over the stability of oil exports from the Middle East.

Market tensions deepened after Iran announced the closure of the Strait of Hormuz, one of the world’s most critical energy shipping routes. The strategic waterway handles roughly 20% of global crude oil shipments, making any disruption a major concern for energy markets and oil-importing nations.

Investor anxiety was further fuelled by uncertainty surrounding US trade and sanctions policies. On Tuesday, US President Donald Trump announced on his Truth Social platform that he had abandoned a proposed 20% US reimbursement fee, opting instead for new trade and investment agreements with Gulf states.

Trump said the Gulf nations would make “massive” investments in the United States, describing the planned arrangements as beneficial for both sides. His comments followed earlier threats to tighten restrictions on Iranian ports while allowing vessels from other countries to continue operations under revised cargo charges, a move that heightened concerns over global shipping and supply chains.

The latest surge marks a dramatic turnaround from the recent decline in crude prices. Brent had slipped to around $72 per barrel last week as geopolitical tensions eased, OPEC+ members increased production, and concerns grew over slowing global demand. Prices recovered to $76 on Sunday before climbing sharply to almost $85 amid the renewed conflict.

Commenting on the development, Olufemi Idowu, Partner at Kreston Pedabo, said the renewed hostilities have restored a significant geopolitical risk premium to global oil markets. He, however, expressed optimism that Nigeria may not experience an immediate increase in petrol prices.

“I do not expect any major upward review in the local pump price of petrol because oil prices are still significantly lower than the level we had during the war,” Idowu said.

For Nigeria, the rally could provide a welcome boost to government revenues and foreign exchange earnings. Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) shows the country’s average crude oil and condensate production rose by 2.3% to 1.74 million barrels per day in June, up from 1.70 million barrels per day recorded in May, marking the country’s strongest production performance in more than six years.