Brent crude, Nigeria's benchmark oil, climbed 3.37 percent to $117 per barrel on Friday as geopolitical tensions in the Middle East heightened concerns about global energy supplies. US-traded West Texas Intermediate gained 3.39 percent to $102.80 per barrel, according to market data as of 5.24 p.m. West Africa Time. The price gains reflected escalating Houthi attacks in Saudi Arabia and an oil spill off the United Arab Emirates coast, which intensified worries about the security of the world's largest oil-exporting region. Saudi Aramco, the Saudi state-owned oil giant, ordered the evacuation of its Dhahran headquarters on Thursday as fighting intensified between Saudi Arabia and Yemen-based Houthi forces.
Brent had reached $115.16 per barrel earlier on Friday, its highest level since May 4, and was on course for a 4.4 percent weekly gain, marking its third consecutive weekly increase. The price rally was accompanied by a sharp surge in crude tanker freight costs. Shipping two million barrels of crude from the United States to Japan aboard a very large crude carrier is expected to cost approximately $81 million in late November, compared with an average of $9.1 million for the same voyage a year earlier, according to international media reports. This translates to about $40.50 per barrel, roughly nine times the cost recorded a year earlier. Similarly, chartering a very large crude carrier to transport two million barrels of US crude from the Gulf of Mexico to China had reached about $80 million earlier this month.
The combination of elevated freight rates, insurance costs and geopolitical risks is reshaping global crude trade patterns. Higher shipping charges are making some shipments less attractive to buyers and forcing refiners to reconsider their sourcing strategies. Asian refiners are considering alternative supplies from the Middle East and Latin America, signalling a shift in established trade flows. The pressures extend beyond crude oil to refined products including petrol, diesel, aviation fuel and fuel oil, whose international prices are also affected by transportation and insurance expenses.
In Nigeria, where petrol prices are closely linked to the cost of imported products and the pricing of locally refined fuel, sustained increases in international oil and shipping costs could add to domestic fuel-price pressures. The effect will depend on crude sourcing decisions, refinery economics, product imports and movements in the naira exchange rate. Energy analysts say further price movements will depend on the trajectory of the conflict, the security of key shipping routes and whether elevated freight rates continue to constrain the movement of crude oil across international markets.