Nigerian crude and major oil contracts have advanced to a 10-day high, as escalating attacks between the United States and Iran heightened inflation risks globally. Brent crude jumped nearly 3%, trading above $90 a barrel amidst crossfire in the Middle East, where two ships reportedly came under attack while attempting to pass through the Strait of Hormuz.
Nigeria’s light sweet crude grades, specifically Bonny Light, Qua Iboe, and Forcados, are anchored around $93/barrel. This surge occurs even as Brent traded in the mid-to-high $80s range, reflecting a broader stabilization in the crude complex.
Middle East Tensions Disrupt Shipping
Early on Monday, July 20, 2026, traffic through the Strait of Hormuz was nearly zero after several days of increasingly hostile interactions between the United States and Iran. The attacks on vessels are expected to intensify concerns regarding the security of ships utilizing the Strait, particularly as they navigate near Oman, sometimes with transponders turned off or with US military assistance.
One of the few vessels observed attempting to transit the Strait of Hormuz on Monday was a Marshall Islands-flagged bulk carrier, emerging from the Persian Gulf with its transponder off as it neared the strait. Additionally, one liquefied petroleum gas (LPG) carrier associated with a dark fleet, known for shipping Iranian exports, appeared to be heading for the Strait.
The United States and Iran have engaged in an escalating cycle of reprisal attacks, with U.S. Forces launching a fresh volley against Iran after service members were killed. US Central Command stated on Sunday that it had conducted a ninth consecutive night of strikes against command sites, maritime infrastructure, and missile and drone sites and infrastructure in Iran.
These actions were taken to “further reduce” Iran’s capability to attack ships sailing through the Strait of Hormuz. The death of a US soldier in northern Iraq the previous Saturday brought the total to 17 since the commencement of the US-Iran conflict.
Secretary of State Marco Rubio noted in an interview on Sunday that “Iran wants to negotiate but still attacks,” while insisting that Tehran continues sending “signals that it is interested in negotiations, and we have the U.S. Military responding to its missile and drone strikes in recent weeks.” Rubio also indicated “some evidence that there’s a divide within the regime itself in Tehran,” with pragmatic figures favoring a deal and hardliners desiring conflict.
Rubio further explained, “We are taking out Iranian assets that are being used to attack commercial vessels, for instance, when ships move through the Strait of Hormuz.” He added, “As long as Iran insists on controlling an international waterway, we’re going to have to respond to that.” Kuwait has been a significant recipient of Iran’s retaliatory actions.
Kuwait Petroleum Corporation reported “significant material losses” at an unspecified oil site, necessitating its evacuation and resulting in several injured individuals. Furthermore, two Kuwaiti water and electricity plants have been struck.
Nigerian Crude Commands Premium Amid Output Surge
European refiners are paying a physical premium for Nigerian crude grades due to increased geopolitical risks and shipping delays associated with the Middle East and the Strait of Hormuz. This risk is entirely circumvented through the direct Atlantic shipping route for Nigerian grades.
According to NUPRC, Nigeria’s oil output averaged 1.56 million bpd, representing the highest crude oil output since April 2020. Total liquids, including condensates, output has averaged 1.735 million bpd following four consecutive months of growth.
Terminal output data indicates that Bonny remains Nigeria’s top-producing terminal with approximately 318,000 bpd, closely followed by Forcados at around 306,000 bpd. This production increase is attributed to enhanced security measures, leading to an extended period of pipeline uptime and the reactivation of previously constrained fields.
The domestic demand landscape has been significantly altered by the expansion of Dangote Petroleum Refinery. The refinery recently lifted approximately 40.4 million barrels of crude within 60 days alone from Nigerian grades such as Bonny Light, Forcados, and Bonga for its processing needs. This substantial in-house demand establishes a strong domestic crude floor under Nigerian oil grades, a factor regulators and producers are working to reconcile with high-value Atlantic grade loadings.
