Brent near $90 as Hormuz, Black Sea supply routes hit
Simultaneous military disruptions at the Strait of Hormuz and the Caspian Pipeline Consortium terminal have pushed Brent crude near $90, triggering a fiscal windfall for Nigeria while threatening global supply tightness.
Brent crude rose 1.46 percent to $89.39 a barrel on Monday, while West Texas Intermediate gained 1.30 percent to $82.84, hitting their highest levels since June 10. The surge stems from simultaneous military disruptions at two critical oil export arteries: the Strait of Hormuz and the Caspian Pipeline Consortium’s Black Sea terminal.
Tanker traffic through the Strait of Hormuz has plummeted to a two-month low as shipowners suspended transits amid a ninth consecutive day of US air strikes on Iranian military targets. Commercial vessels are increasingly navigating in "dark mode" by disabling tracking systems to avoid detection, though Iran's Islamic Revolutionary Guard Corps claimed it intercepted four such ships last week.
Supply fears compounded after a drone struck the tanker NELSA at the CPC's Single Point Mooring 1 in the Black Sea, forcing a second halt to loadings in under 24 hours. The CPC pipeline moves more than two-thirds of Kazakhstan's crude exports alongside Russian Caspian output, accounting for roughly one percent of global supply.
The suspension directly affects major international oil shareholders including Chevron, ExxonMobil, Shell, Eni, Lukoil, Rosneft and KazMunayGas. The Brent futures curve remains firmly in backwardation, signalling strong demand for immediate deliveries as traders price in sustained near-term scarcity.
Escalation widens across the Gulf
The geopolitical risk broadened on Monday as air raid sirens sounded in Bahrain, home to the US Fifth Fleet, following Iranian ballistic missile attacks on American facilities in Jordan, Kuwait and Syria. US Central Command said its latest strikes targeted Iranian coastal surveillance and logistics. President Donald Trump told reporters aboard Air Force One: "We hit them very hard again tonight."
Nigeria reaps fiscal windfall
For emerging markets, the price spike presents a mixed picture. Nigeria, Africa’s largest crude producer, is poised for a significant fiscal boost. Brent at $89.39 sits well above the Nigerian federal government’s 2026 budget benchmark of $64.85, bolstering government revenues and foreign exchange inflows.
However, economists warn that sustained prices near $90 risk reigniting global inflationary pressures. Higher crude costs translate to elevated fuel and transportation expenses, placing particular strain on oil-importing developing economies even as exporters like Nigeria build reserves.
