Global oil prices have surged again, rising to $78 per barrel following the renewed tensions between the United States and Iran, leading to a declaration of the closure of the Strait of Hormuz by Tehran.
The closure of the Strait of Hormuz, the world’s most critical maritime chokepoint, has raised fears over disruptions to shipping through the route.
The latest crisis follows a weekend of heavy missile and drone strikes between the U.S. and Iran. On Sunday, Iran’s Islamic Revolutionary Guard Corps (IRGC) announced the strategic waterway was closed “until further notice” after firing a warning shot against a commercial vessel, demanding an end to “U.S. interference” in the region, according to a statement cited by Reuters.
Iran has also expanded its attacks to include U.S. facilities and allies in the Gulf, such as the UAE, Qatar, and Jordan, marking a significant re-escalation of hostilities.
It maintains that regular traffic will not be restored unless the United States completely ends its military operations and presence within the strategic waterway.
However, the U.S. Central Command and President Trump have disputed Iran’s claim, asserting that the Strait remains open under U.S. protection and that commercial traffic is being escorted through.
Despite these assurances, ship-tracking data shows that vessel traffic through this waterway has significantly dropped.
Analysts say the latest escalation has injected a fresh geopolitical risk premium into the market, with commercial vessel traffic through the strait declining sharply.
Brent Crude, the international benchmark, rose to $78.38, while WTI sold for $73.58 per barrel, on Monday, July 23, 2026, according to Oilprice.com
Oil prices had fallen last month after the US and Iran reached an agreement to end the war. From a high of about $100, it dropped to below $70 per barrel in June. However, the collapse of the ceasefire deal has forced crude oil prices to rise again, almost reaching $80 per barrel.
Market analysts warned that although the current price remains below the highs recorded during previous geopolitical crises, the renewed disruption has injected fresh uncertainty into an already fragile global energy market.
Countries across Asia and Europe, which depend heavily on crude shipments through the Gulf, are expected to feel the immediate impact should the disruption persist. Refiners are already monitoring shipping schedules as insurers reportedly reassess risk premiums for vessels operating within the region.
For Nigeria, Africa’s largest crude oil producer, the price increase presents both opportunities and challenges.
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- US Counters Iran’s Strait of Hormuz Closure Claim over Israeli Attacks on Lebanon
- Why Dropping Global Oil Prices Haven’t Triggered Cheaper Petrol at Nigerian Pumps
Higher international crude prices could translate into increased export earnings and improved government revenues, offering temporary relief to public finances. However, economists have cautioned that the benefits may be limited if domestic crude production fails to meet targets or if higher international prices translate into increased costs for refined petroleum imports.
Although the country has expanded local refining capacity in recent years, analysts noted that movements in global crude prices still influence domestic fuel costs, logistics expenses and broader inflationary trends.
Currently, a litre of petrol at filling stations is selling between N1,150 and N1,250, reflecting a drop from the highs of between N1,300 and N1,500 per litre sold during the peak of the Middle East crisis in the last four months. Consumers have continued to call for a further drop to between N800 and N900, a level it was before the Middle East crisis started in late February, when crude oil prices hovered between $70 and $72 per barrel.
Industry stakeholders expressed concern that prolonged instability in the Middle East could disrupt global shipping, raise freight costs and increase insurance charges for cargoes moving through international waters.
Shipping companies are reportedly reviewing alternative routes, although many of the available options are significantly longer and more expensive, potentially adding weeks to delivery schedules and increasing costs for importers.
With the rising price of crude, there are fears that the pump price of fuel may rise again in Nigeria if it persists.
Victor Ezeja is a Nigerian journalist skilled in producing insightful news analyses, feature stories, and interviews that simplify complex issues and drive informed public discourse. His work combines rigorous research, balanced reporting, and compelling storytelling to highlight developments shaping industries and society. Victor, who holds a Master's Degree in Mass Communication, specializes in energy, aviation, business, and economic reporting. He can be reached via @VICTOREZEJA on X