Uche Cecil Izuora
Oil fell to settle near $100/bbl on signs Saudi Arabia is boosting exports via the Strait of Hormuz and fresh hopes for diplomatic progress in the Iran war.
Brent, the global benchmark, declined for a fourth session, settling 3.4 per cent lower. The October West Texas Intermediate contract, which expires Tuesday, fell about 4.5 per cent.
The development may ease petrol price pressures in Nigeria which has heightened cost of living.
Satellite data showed Saudi Arabia’s observed oil loadings from inside the Persian Gulf jumped over the weekend, with the highest number of ships seen at the nation’s main Gulf port since June. The images indicate the kingdom is successfully redirecting exports back toward the Gulf following the shutdown of its East-West pipeline due to drone attacks.
Energy infrastructure has increasingly been caught in the crosshairs of regional conflicts. Ukraine has also been targeting Russian refineries, raising concerns over the time needed for repairs and a full return to normal operations.
Meanwhile, U.S. President Donald Trump told Fox News he would “probably” be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the UN General Assembly in New York this week, adding to hopes for potential diplomatic progress.
Oil prices are up more than 65 per cent this year, while diesel remains at the center of the global fuels crunch, reaching a fresh high above $6.50 a gallon at U.S. pumps. Diesel futures settled about 3% lower Monday.
Crude and liquefied natural gas flows through Hormuz have been increasing in recent weeks. Admiral Brad Cooper, head of U.S. Central Command, said volumes over the past two weeks were at a six-month high.
Saudi oil moving through Hormuz averaged about 2.9 MMbpd over six days through September 18, up from about 700,000 bpd in August, according to satellite data cited by JPMorgan.
“Focus has shifted to improving oil and LNG flows through Hormuz and the possibility of diplomatic progress on the sidelines of the UN General Assembly in New York,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. “The worst pressure on crude may be easing.”
Supply risks remain in the Middle East. Saudi Arabia issued air-raid alerts for Riyadh over the weekend, as well as warnings in Red Sea hubs including Yanbu, amid continued Houthi attacks.
Libya’s largest oil field also reduced output after a pipeline was shut by an “armed group,” according to the National Oil Corporation. The company warned that a prolonged closure could halt production, transportation and exports from the Sharara field.
Nigeria’s fuel prices climbed to record highs as tensions in the Middle East push up global oil prices, piling fresh cost-of-living pressure on President Bola Tinubu’s government ahead of elections in less than six months.
The surge has occurred even as the Dangote refinery, operates at full tilt of 700,000 barrels per day, highlighting the limits of domestic refining in shielding consumers from international oil market shocks.
Petrol prices have risen to about 1,400 naira ($1.05) a litre in Lagos and Abuja this month from roughly 1,200 naira a month earlier, Reuters checks showed, while some stations in northern Nigeria charged as much as 1,500 naira. Diesel was selling higher, at more than 2,000 naira a litre.
“Fuel costs are eating into our earnings. After buying fuel, there is very little left for our families,” said Abuja-based truck driver Caleb Ojobo.
The price increase followed Dangote refinery’s decision to raise its wholesale loading-bay, or gantry, price to 1,350 naira per litre, reflecting higher crude costs and the continued exposure of fuel prices to global market swings. OPEC member Nigeria is Africa’s largest oil producer.
Ahead of the 2027 general election, to be held on January 16, opposition politicians have made fuel prices a central test of the government’s economic record.
The latest rise has revived the debate over Tinubu’s removal of the petrol subsidy, a reform praised by investors but blamed by critics for worsening a cost-of-living crisis that has eroded household purchasing power. The president has said there is no going back to subsidies.
“Fuel pricing tends to function as a proxy for the broader cost-of-living debate, and sustained increases raise the political premium on demonstrating that reform is delivering offsetting benefits,” said Jordan Lawrence, CEO of Damisa Technologies, a fintech firm.
The high fuel prices come as Dangote refinery has started selling shares to the general public to raise funds for the expansion of his refinery.
While the initial public offering has generated excitement has as thousands seek a stake in the refinery, Nigerians are paying more at the pump.
“These new costs continue to inflict and deepen poverty among the populace,” Nigeria Labour Congress President Joe Ajaero said, calling for additional wage support and more naira-denominated crude to the refinery to help curb further price rises.
Analysts say fuel prices will put pressure on inflation, which ticked lower to 15.39% in August from 15.43 per cent in July. Food inflation also eased slightly, but remained at a higher 19.57 per cent.