Bonny Light gains as Middle East tensions threaten alternative routes around Strait of Hormuz…..
Nigerian crude prices climbed above $115 a barrel over the weekend, as renewed tensions in the Middle East and the shutdown of a key Saudi Arabian oil pipeline heightened concerns over global supply.
Brent crude also rallied, rising as much as 3.7 per cent to above $108 a barrel before paring some of its gains.
The price movement followed Saudi Arabia’s decision to shut its East-West oil pipeline as a precautionary measure after attacks in the region.
The pipeline is a major alternative route for transporting crude without relying on the Strait of Hormuz, making its disruption a fresh source of concern for oil traders already monitoring risks to Middle Eastern supplies.
Nigeria’s Bonny Light, a light and sweet crude grade, benefited from the broader strength in international oil prices, trading above $115 a barrel.
The Nigerian grade continues to attract a premium among refiners in Europe and the Mediterranean because of its low sulphur content and favourable refining yields.
However, analysts say regional freight costs and fluctuations in near-term market liquidity could limit further gains in Nigerian crude prices.
Market movements remain particularly sensitive to developments in the Middle East, with supply concerns continuing to provide upward pressure on benchmark Brent.
The latest escalation also affected diplomatic efforts to secure alternative shipping arrangements through the Strait of Hormuz.
A meeting scheduled for Monday between Iran and several Persian Gulf states on a temporary shipping corridor through the strategic waterway was postponed, according to Oman’s Foreign Minister Badr Albusaidi.
Bahrain had earlier indicated that it would not participate in the talks, while reports suggested Saudi Arabia was also reluctant to support the proposal following the attack on its East-West pipeline.
Oil markets are also watching developments around Yemen, where Iranian-backed Houthi fighters could have greater freedom to disrupt shipping along the Red Sea and the Bab el-Mandeb Strait.
The combined risks to major oil and shipping routes have added to concerns over global energy supplies.
Crude prices have risen more than 75 per cent so far this year amid the widening US-Iran confrontation and its impact on production and shipping across the region.
Demand from China, the world’s largest crude oil importer, has also provided additional support for prices through increased purchases.
The surge in energy prices is, however, creating fresh inflationary pressures for the global economy, with crude oil, natural gas and refined petroleum products such as diesel becoming more expensive.
The development comes as markets await the US Federal Reserve’s latest interest-rate decision, following reports of an acceleration in inflation in August.
Saudi Arabia’s crude output had already come under pressure before the latest pipeline disruption, with the kingdom reporting to OPEC that its May production fell to its lowest level since 1990.
The United States has also intensified pressure on Iran, with Treasury Secretary Scott Bessent expected to announce additional sanctions targeting a major Iranian bank as Washington seeks to restrict Tehran’s energy revenues.
Nigeria production strengthens
Against the backdrop of tighter global supply concerns, Nigeria’s oil production has continued to show signs of improvement.
Data from the Nigerian Upstream Petroleum Regulatory Commission and OPEC indicate that Nigeria’s combined crude oil and condensate output averaged about 1.68 million barrels per day in August 2026.
Crude-only production was estimated at between 1.50 million and 1.57 million barrels per day, depending on the treatment of condensate.
August marked the fourth consecutive month in which Nigeria’s production remained broadly aligned with its OPEC quota and agreed output levels.
The improvement was supported by the resolution of single-buoy mooring and transit bottlenecks at facilities, including the Erha field.
Among Nigeria’s major producing streams, Bonny Terminal accounted for about 320,000 barrels per day, followed by Forcados at approximately 317,000 barrels per day.
Qua Iboe contributed about 171,000 barrels per day, while Escravos and Bonga produced roughly 131,000 and 92,500 barrels per day respectively.
The Federal Government has set an ambition of raising national oil production to three million barrels per day by 2030.
However, current gains are being driven largely by the resolution of operational bottlenecks, routine field maintenance, improved security in the Niger Delta and incremental optimisation of existing assets, rather than a sharp expansion in production capacity.
For Nigeria, sustained higher crude prices could provide additional revenue support, but prolonged geopolitical instability also carries risks for shipping costs, energy prices and the broader global economy.
