Oil prices drop amid raging Middle East tensions
The raging Middle East tensions have continued to take toll on the global oil market with the prices of crude oil falling by almost $5 per barrel on Monday. This was coming after Israel’s retaliatory offensive on Iran, one of the largest oil-producing countries in the world, over the weekend. On Saturday, Israel carried out […]
A crude oil facility
The raging Middle East tensions have continued to take toll on the global oil market with the prices of crude oil falling by almost $5 per barrel on Monday.
This was coming after Israel’s retaliatory offensive on Iran, one of the largest oil-producing countries in the world, over the weekend.
On Saturday, Israel carried out what it described as “precise and targeted” airstrikes on Iran.
“The targets included Iran’s air defences, as well as missile and drone production, and launch facilities,” according to an Israeli source quoted by BBC.
But the airstrikes did not affect the price of crude as earlier envisaged.
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According to several reports, the price of West Texas Intermediate tumbled from $71.78 on Friday to $68.01 early on Sunday morning before recovering slightly.
Brent Crude fell from $76.05 on Friday to below $72 before bouncing back towards $73.
This was a sharp departure from what happened on October 1st when Iran fired almost 200 ballistic missiles in response to Israel’s killing of Hamas leader, Ismail Haniyeh in Tehran.
Several reports had predicted a rise in price of crude oil with some analysts projecting $100 before the end of the year, the development which may further worsen the macroeconomic challenges in Nigeria as higher crude oil prices raise inflation.
Analysts have warned that any rise in prices of crude oil could spell doom for Nigerians who are already reeling from the effect of high cost of fuel.
But it would also result in increased revenue for the government.
“PMS, Diesel, and other refined products may increase as well; Inflation may go higher than we already have; Revenues to the government are expected to go up. The government will decide who will pay the increase in petroleum products prices if this happens,” economist, Paul Alaje, said recently.
In a related development, China oil giant PetroChina plans to shut its largest Chinese refinery in 2025 after years of considering moving the processing to a smaller site, according to a report by Reuters on Monday.
Many refineries are already shutting down in Europe and part of Asia on account of over-capacity amid adoption of alternative mobility like electric vehicles.
According to a report, China has seen weaker-than-expected road fuel demand in 2024, which has prompted a decline in refining margins, leaving many plants in debt.