Brent rises 2.5% as fears of mine deployment and renewed attacks revive concerns over global crude supply……
Crude oil prices have climbed above $90 a barrel after renewed military confrontation between the United States and Iran heightened fears of a fresh disruption to crude shipments through the Strait of Hormuz.
Brent crude futures rose by $2.21, or 2.51%, to $90.31 a barrel as of 0436 GMT on Monday, August 31, while US West Texas Intermediate (WTI) gained $1.83, or 2.19%, to $85.23, according to market data.
The latest price rally followed a new round of attacks involving the two countries, raising concerns that the Strait of Hormuz could once again become a major flashpoint for global energy markets.
The escalation began on Sunday after the US military struck Iranian rocket launchers on Larak Island in the Strait of Hormuz.
Washington said the launchers had been identified as being prepared for an operation to deploy mines in the strategic waterway.
The development prompted a retaliatory response from Iran, with the Islamic Revolutionary Guard Corps launching missile and drone attacks against US bases in Jordan early Monday, according to Iran’s state-run IRNA.
The situation has intensified concerns over the security of one of the world’s most important oil shipping routes, particularly after the US military warned that Iranian forces could deploy sea mines in the waterway.
Captain Tim Hawkins, a spokesperson for US Central Command, said US forces had observed Iranian Revolutionary Guard Corps personnel preparing to launch rockets carrying sea mines into the Strait of Hormuz.
“US forces are monitoring the area closely and remain prepared to protect the free flow of commerce through this essential waterway,” Hawkins said.
The US military said it had destroyed two Iranian launchers on Larak Island in Sunday’s operation. It was the first known US attack on Iran since late July.
Oil market reverses recent decline
The latest escalation comes less than a week after oil prices had fallen sharply on expectations that diplomatic efforts could help restore normal shipping through the Strait of Hormuz.
Iran and Oman had announced on August 25 a proposed phased framework aimed at easing restrictions on maritime traffic through the waterway.
The proposal included a temporary joint navigational corridor and a joint mine-clearance project, while technical discussions were expected to continue towards establishing a permanent navigation corridor.
The longer-term arrangement was expected to cover traffic management, information sharing and security services, helping to ease fears of a prolonged disruption to crude shipments.
The optimism had weighed on oil prices. Brent crude fell to $86.28 a barrel on Wednesday, August 26, after dropping $2.30, or 2.6%, while WTI declined $2.08, or 2.53%, to about $80.29.
The renewed military confrontation has now reversed some of those gains, with traders once again pricing in the risk that tensions around the waterway could interfere with global oil supplies.
The latest attacks also mark a shift from the Trump administration’s strategy in recent weeks, which had increasingly emphasised economic pressure on Tehran rather than sustained military confrontation.
On August 20, US President Donald Trump announced what he described as “economic warfare” against Iran and warned countries, businesses and financial institutions providing economic support to Tehran that they could face severe consequences.
Why Hormuz matters to oil markets
The Strait of Hormuz is a critical route for international energy trade, making any threat to shipping through the waterway particularly sensitive for oil markets.
The possibility of mines being placed in the route has heightened concerns that even without a complete closure, shipping could be slowed by security checks, rerouting and increased insurance and transportation costs.
For oil traders, the renewed uncertainty introduces the possibility of a more sustained supply disruption, particularly if the latest confrontation develops into a broader military escalation.
That risk is reflected in Monday’s price movement, with both Brent and WTI recording gains of more than 2% during early trading.
What higher oil prices mean for Nigeria
For Nigeria, a sustained increase in international crude prices could strengthen government revenues and foreign exchange earnings because oil exports remain an important source of both.
The current price level is also significantly above the crude oil benchmark used in Nigeria’s 2026 budget.
The federal budget is based on a benchmark crude price of $64.85 per barrel, meaning Brent trading above $90 leaves a substantial gap between the budget assumption and the prevailing international market price.
If Nigeria can maintain crude production and successfully sell its output, the higher prices could translate into additional oil revenue and stronger foreign exchange inflows.
However, the impact on the wider economy is not entirely positive.
A prolonged increase in global crude prices could keep pressure on domestic fuel and transportation costs, particularly if higher international prices feed into local petroleum product prices.
During the recent period of elevated oil prices, petrol prices rose above N1,200 per litre in some Nigerian markets, increasing transportation costs for households and businesses and raising the cost of moving goods.
The development also comes against the backdrop of mixed inflation trends.
According to the latest National Bureau of Statistics data, Nigeria’s headline inflation rate eased to 15.43% in July 2026 from 15.91% in June.
Food inflation, however, moved in the opposite direction, rising sharply to 20.31% year-on-year in July from 17.52% in June. Monthly food inflation also accelerated to 5.56% from 3.75%.
With oil prices now back above the $90 mark, attention will remain focused on developments around the Strait of Hormuz and whether the latest US-Iran confrontation results in an actual disruption to crude shipments.
Any prolonged threat to the waterway could push oil prices higher still, while a rapid de-escalation or restoration of safe navigation could ease some of the risk premium that has returned to the market.
