No respite yet as oil price hits $102

Nigerians are bracing for renewed economic pressure as global crude oil prices climbed to $102 per barrel yesterday, reflecting 3.51 per cent rise in last 24 hours. The latest surge in oil prices, driven by a mix of supply constraints and heightened geopolitical tensions in key producing regions, has dashed hopes of relief for households […]

Nigerians are bracing for renewed economic pressure as global crude oil prices climbed to $102 per barrel yesterday, reflecting 3.51 per cent rise in last 24 hours.

The latest surge in oil prices, driven by a mix of supply constraints and heightened geopolitical tensions in key producing regions, has dashed hopes of relief for households and businesses already grappling with persistent economic headwinds.

The US-Iran hostilities have disrupted global oil market in the last two months, with crude oil prices selling above $100 per barrel.

There has been some stability and price slide after a ceasefire between the US and Iran but the ceasefire was further extended yesterday by the US President Donald Trump “until negotiations with Iran conclude “one way or the other.”

President Trump also ordered that the U.S. blockade at the Strait of Hormuz remains in place.

With the Strait of Hormuz still under heavy blockade, it means there is no end in sight to the disruption to the market as the waterway controls one fifth of global oil supply.

Hopes of U.S.-Iran negotiations resuming as early as Wednesday were dashed after reports emerged that the trip of U.S. Vice President JD Vance to Pakistan, which hosted the previous round of failed talks, has been put on hold.

As of early Wednesday, there were no signs that the talks could resume soon while the U.S. is keeping the naval blockade outside the Strait of Hormuz, which Iran has called a “siege” and a violation of the ceasefire.

Meanwhile, Lufthansa Group said it would remove a total of 20,000 short-haul flights from its European summer schedule as the airline industry faces jet fuel shortages and soaring prices.

The cancellation of the 20,000 uneconomical short-haul flights through October would save the group about 40,000 metric tons of jet fuel, the price of which has doubled since the outbreak of the Iran conflict, Lufthansa said.

“For the flights scheduled in the summer timetable, the Group expects a largely stable fuel supply,” the airline said, adding that “Lufthansa is pursuing a range of measures to this end, including the physical procurement of jet fuel as well as price hedging.”

 

 

 

Lufthansa last week said it is accelerating plans to reduce its flight program and retire some aircraft earlier “in view of significantly increased kerosene prices, which have more than doubled compared to the period before the Iran war, as well as rising additional burdens from labor disputes.”

 

 

 

“The package for accelerated implementation of fleet and capacity measures is unavoidable in light of the sharply increased kerosene costs and geopolitical instability,” said Till Streichert, Chief Financial Officer of Lufthansa Group.

 

 

 

The war in Iran has cut most of Europe’s imports of jet fuel, while local output has been falling for nearly two decades due to dozens of refineries closing permanently or being converted to biofuel production.

 

 

 

Nigeria’s Dangote Refinery has stepped in to offer some relief to the European countries as over 1bn litres of Jet fuel was supplied in the last 50 days.