Bonny Light Prices Rise Amid Iran-US Tensions at Strait of Hormuz
Global supply fears push Nigerian crude higher
Nigeria’s benchmark crude oil grade, Bonny Light, closed slightly higher on Friday as escalating tensions between Iran and the United States around the Strait of Hormuz continued to rattle global oil markets.
Traders are closely monitoring developments around the strait, a critical shipping corridor through which approximately 20 per cent of the world’s oil supply passes, amid fears that ongoing military and diplomatic confrontations could further disrupt global supply chains.
The price uptick comes as Iran’s restrictions around the Strait of Hormuz disrupted oil movement, while a series of tanker attacks linked to US military operations deepened supply concerns among market participants.
Nigeria currently produces approximately 1.71 million barrels per day, though domestic crude supply shortages continue to weigh on local refining capacity and fuel pricing. The Dangote Refinery, with a processing capacity of 650,000 barrels per day, is estimated to require crude imports to meet about 71 per cent of its needs in May, further exposing Nigeria’s refining sector to global market volatility.
Analysts have set an expected crude oil price target of around 90 dollars per barrel should tensions persist and supply disruptions deepen.
Energy experts warn that higher crude oil prices could trigger a ripple effect across Nigeria’s economy, potentially driving up petrol prices, transport fares, and food inflation. Despite being Africa’s largest oil producer, Nigeria remains vulnerable to global oil market shocks due to its persistent fuel supply and refining challenges.
Bonny Light, classified as a light and sweet crude due to its low sulfur content, is among the most sought-after grades on global markets for its ease and cost-effectiveness in refining.
The development has renewed calls for Nigeria to accelerate domestic refining capacity and reduce its dependence on imported petroleum products, as global geopolitical risks continue to threaten energy price stability.
