…As oil prices surge 7%, Brent hits $80/b
The renewed US-Iran hostilities that sent global crude prices surging on Wednesday could halt — or reverse — the petrol price cuts Nigerian consumers have enjoyed since late May, industry watchers say, as the Dangote refinery’s feedstock costs are poised to climb again just as domestic pump prices had begun easing.
Brent crude jumped roughly seven per cent to around $80 per barrel and WTI rose to about $75.6 after President Donald Trump declared the fragile US-Iran ceasefire “over” following overnight US strikes on more than 80 targets in Iran, including air defence systems and anti-ship missile capabilities, after Iran attacked commercial vessels transiting the Strait of Hormuz, CNBC reported.
Speaking at the NATO summit in Ankara, Turkey, Trump said he considered the ceasefire over and that he no longer wanted to deal with Iran, dismissing further negotiations as a waste of time.
His remarks followed a fresh round of US strikes on Iran, launched after Iranian attacks on three commercial vessels transiting the Strait of Hormuz, among them the Qatari tanker Al Rekayyat and a Saudi vessel. US Central Command said its forces struck more than 80 targets, including air defence systems, command and control networks and anti-ship missile capabilities, and hit over 60 Revolutionary Guard boats. Separately, the US Treasury Department revoked a waiver that had permitted Iran to sell its oil, a key revenue source for Tehran.
In retaliation, Iran said it had targeted 85 military installations in Bahrain and Kuwait, prompting air raid sirens in both countries. The Gulf Cooperation Council condemned the strikes, and the crossfire has raised fresh doubts over whether the fragile ceasefire can hold.
The escalation marks a sharp reversal from earlier expectations of a supply glut, following OPEC+’s move to raise production quotas in recent months.
The escalation marked a sharp reversal after prices had tumbled below pre-war levels following a Memorandum of Understanding that Trump signed with Iran on June 18, before climbing back toward $78 a barrel as tanker traffic through the Strait of Hormuz remained at roughly a third of normal levels.
The timing is significant. Dangote Petroleum Refinery has cut its ex-depot petrol price four times since May 30 — a cumulative reduction of over N200 per litre, bringing it to N1,075 per litre by July 2 — alongside cuts of N300 per litre on diesel and N520 per litre on Jet A1. Crucially, the refinery has said this pricing reflects lagged feedstock costs rather than real-time crude swings: it disclosed that its average landing cost of crude was about $124.80 per barrel in May and $95.25 in June, against an international benchmark of roughly $71 per barrel at the time — meaning it had been absorbing losses to pass savings to the market as cheaper cargoes entered its production cycle.
A fresh spike back toward $80 a barrel threatens that trajectory. If sustained, it would raise the cost of crude cargoes the refinery books going forward, likely slowing or halting further ex-depot cuts, and could eventually force a reversal — especially since Dangote has stated future reductions depend on “international crude prices remaining favourable.”
