Global oil prices have continued the week in gain amid tit-for-tat attacks by both Iran and Israel, as the crisis in the Middle East is far from cooling off.
As of filing the report, Brent crude was trading at $74.25 per barrel, with West Texas Intermediate at $73.10 per barrel. While Nigerian crude futures such as Brass Rivers and Qua Iboe stood at $77.09 and $77.14 per barrel.
This comes as Iran at the weekend struck Israel’s 197,000-barrel-per-day Haifa Refinery, operator Bazan confirmed in a statement on Sunday.
The refinery operator, Bazan, however, confirmed that the plant remained operational but the downstream section has been shut down.
“The refining facilities continue to operate, while some downstream facilities at the complex have been shut down,” it said.
In a swift response, Israel struck Iran’s two critical gas treatment facilities in the southern part of the country.
The development had resulted in major disruption in the Middle East.
Reacting, S&P Global Commodity Insight’s head of near-term oil analysis, Richard Joswick, said, as quoted by Reuters, that Iranian crude exports are disrupted and an imminent danger to the Chinese, their major exporter.
“If Iranian crude exports are disrupted, Chinese refiners, the sole buyers of Iranian barrels, would need to seek alternative grades from other Middle Eastern countries and Russian crudes.”
“This could also boost freight rates and tanker insurance premiums, narrow the Brent-Dubai spread, and hurt refinery margins, particularly in Asia,” Joswick added.
Another ripple effect of the Israel-Iran strikes is that tanker owners are already refusing to send their vessels to the Persian Gulf and pulling out the ones that are already there.
Accordingly, the chief executive of Frontline, the world’s largest tanker operator, quoted by oilprice.com, said, “Trade is going to become more inefficient, and, of course, security has a price”.
The Israeli-Iran conflict escalation started on Friday upon an attack on an Iranian nuclear site by Israeli forces. Iran retaliated with an attack on Israel’s major cities. Reacting, Israel also fired several strikes at Tehran and other Iranian cities.
DAILY POST reports that the Centre for the Promotion of Private Enterprise outlined the upsides and risks of the Israeli-Iran conflict on Nigerian economy.
