Oil prices jumped about 4% on Thursday, with Brent crude reaching $105.26 a barrel as attacks on shipping in the Middle East intensified.

U.S. West Texas Intermediate also broke above $100 for the first time since May, reaching $100.04. Brent has gained more than 30% from its early-August low as the conflict involving the United States and Iran continues to disrupt energy flows.

Iran Reports Attacks Near Strait of Hormuz

The latest escalation centred on the Strait of Hormuz. Iran said it attacked 10 ships near the waterway on Wednesday, following U.S. strikes that sank five Iranian oil tankers. Tehran’s Islamic Revolutionary Guard Corps has warned that it would escalate its response to further attacks.

Shipping Traffic Falls

Shipping through the Strait has fallen sharply. Preliminary data showed seven vessel transits on Wednesday, compared with 12 the previous day and a 10-day average of about 14.

The waterway normally carries a major share of global oil and liquefied natural gas shipments. Flows have fallen sharply during the conflict, adding pressure to supplies available to international buyers.

Red Sea Pressure Grows

The Red Sea has also come under renewed pressure. Iran-aligned Houthi forces seized Yemen’s port of Mocha on Thursday, adding to concerns over traffic around the Bab el-Mandeb Strait.

The developments are being watched closely by oil-producing countries, including Nigeria, where crude exports remain an important source of foreign exchange and government revenue.

What It Means for Nigeria

For Nigeria, Brent above $100 presents both an opportunity and a challenge.

Higher international crude prices can increase the value of Nigeria’s oil exports and potentially strengthen government revenue when production and export volumes remain stable. The benefit, however, depends on how much crude Nigeria is able to produce and sell and how much of the additional revenue is absorbed by other fiscal pressures.

The effect on motorists is less straightforward. Nigeria’s domestic fuel market is influenced by crude prices, refining costs, exchange rates and other factors. A sustained rise in international oil prices could therefore add pressure to the cost of petroleum products, although the impact would not necessarily be immediate or move one-for-one with Brent.

China Demand Remains Important

China, the world’s largest crude importer, has increased purchases in recent weeks after months of subdued demand. Continued Chinese buying could provide further support for prices if Middle East supplies remain constrained, while weaker imports could moderate the rally.

OPEC Cuts Demand Forecast

OPEC has lowered its forecast for global oil demand growth in 2026 to 380,000 barrels per day, its fifth consecutive downward revision. The group also reported that its oil output fell by 640,000 barrels per day in August as the conflict affected Saudi exports and U.S. measures reduced Iranian shipments.

Nigeria Watches the Oil Market

The latest surge puts crude prices at a level that could improve Nigeria’s oil revenue outlook while increasing attention on domestic fuel costs and broader inflation.

In Nigeria, the key question would be whether higher crude prices translate into stronger export earnings without a corresponding increase in domestic energy costs. The answer will depend on how long the Middle East conflict lasts and how global oil flows respond.