OIL HIT $126 A BARREL AS US-IRAN CEASEFIRE FRACTURES, BRENT UP 40% SINCE WAR BEGAN

UAE quits OPEC+; Strait of Hormuz blockade holds; Nigeria's fuel costs directly linked

Oil prices have surged to their highest level since Russia's 2022 invasion of Ukraine, with Brent crude hitting $126 a barrel intraday as the United States and Iran traded fire in the Strait of Hormuz and the ceasefire that had nominally held since early April collapsed under renewed military pressure.

Brent crude rose as much as 7.5 per cent in a single session after US and Iranian forces exchanged fire in the critical strait, a conduit for roughly one-fifth of global oil and natural gas. The international benchmark touched $103.70 before easing to $101.12. Brent prices are now approximately 40 per cent above pre-war levels.

Brent reached $126 a barrel, its highest intraday point since the Ukraine war in 2022, as the full implications of the continued Strait closure became clear to markets. Neither the United States nor Iran has shown signs of breaking the deadlock, and ceasefire negotiations have stalled with both sides refusing to meet.

In a development that further reshapes global energy governance, the United Arab Emirates officially withdrew from OPEC and its wider OPEC+ alliance this week, a move the UAE said was necessary to prioritise its own national interests. The exit of one of OPEC's largest producers further fragments the cartel at the worst possible moment for coordinated supply response.

For Nigeria, the conflict's impact runs in two directions. Higher Brent prices boost fiscal revenue from oil exports, strengthening the Federation Account. But the same elevated crude costs feed directly into Dangote Refinery's input pricing, sustaining high pump prices for Nigerian consumers and businesses.