Nigeria’s key export grade, Bonny Light, experienced a price decrease, falling below $69 a barrel during the second trading session of the week. The latest quote indicates that Nigeria's top-grade oil is trading at $68.8 a barrel.

Oil prices generally edged lower on Tuesday as traders assessed potential supply disruptions stemming from tensions between the US and Iran, following US guidance urging vessels passing through the Strait of Hormuz to be mindful of these tensions. Vessels flying the US flag are instructed to avoid entering Iranian territorial waters and to politely decline requests from Iranian forces to board.

The Strait of Hormuz, located between Oman and Iran, is a critical chokepoint, accounting for about 5% of the world’s oil consumption. Iran, along with other OPEC members such as Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq, export the majority of their crude oil through this strait, primarily to Asia.

OPEC's overall output has seen a decrease, landing between 28–34 million barrels per day (bpd), which is down 60,000 bpd from December. This reduction is partly attributed to reduced output from Nigeria and Libya.

Several major projects are underway in Nigeria, including Shell’s Bonga South West, with discussions involving approximately $20 billion in investments, potentially yielding 150,000 barrels per day. The NNPC and other stakeholders are actively promoting refinery reopenings and gas monetization reforms.

However, rising production costs, roughly 40% higher than in comparable regions, pose a threat to the competitiveness of local producers. Recent estimates indicate that exports have fallen by about 14% despite prices remaining around $70 per barrel amid global concerns.

The European Union is tightening sanctions on Russian oil, aiming to restrict the ports of Kulevi, Georgia, and Karimun, Indonesia—third-country ports that have been facilitating Russia’s oil exports despite existing restrictions. These measures could potentially drive oil prices higher, and markets are closely monitoring the implementation of these policies and the possibility of Russian retaliation.

Geopolitical tensions are seemingly on the rise, contributing to growing supply concerns. Oil prices are currently trading within a range due to these geopolitical pressures. Further price increases and supply disruptions could occur if the EU’s proposed sanctions target Russian refineries and third-party ports. Currently, WTI crude remains between $61 and $66, indicating a period of consolidation. Traders anticipate a breakout, with a move above $66 potentially leading to a rally towards $70, while a drop below $61 might push prices lower.