By Joshua Tosin Ogunsakin 
Nigeria is bracing for a significant hike in petrol prices, with projections indicating that the cost per liter could soar to nearly N900.
This development comes in the wake of new sanctions imposed by the United States on Iran, which have disrupted global oil supplies and triggered a sharp increase in international crude oil prices.
On Thursday, Brent crude futures were up 97 cents, or 1.37 percent, to $71.75 a barrel by 10:57 a.m EDT (14.57 GMT), having gained more than $1 during the session.
The U.S. on Thursday issued new Iran-related sanctions, targeting one individual and several entities, including a Chinese ‘teapot’ oil refinery, for purchasing and processing Iranian crude oil, the US Treasury Department website showed.
Iran produces more than three million barrels per day of crude oil.
“We were looking for some kind of catalyst to move and that was the ticket that pushed us back towards the high,” said Phil Flynn, senior analyst with the Price Futures Group.
Meanwhile, U.S. government data showed a higher-than-expected drawdown last week in distillate inventories, including diesel and heating oil, which fell by 2.8 million barrels, outstripping a drop of 300,000 barrels expected in a Reuters poll.
“U.S. oil demand outlook remains healthy despite lower air travel passenger volumes,” JPMorgan analysts said in a note, adding that reduced U.S. travel activity did not signal broader weakness in the demand outlook.
U.S. crude inventories rose 1.7 million barrels. However, they exceeded expectations for an increase of 512,000 barrels in an earlier Reuters poll.
Some analysts, however, are expecting an uneven oil price uptrend in the near term.
“I am expecting a choppy upward drift in the oil markets right now,” said Kelvin Wong, senior market analyst at OANDA, noting that stimulus measures out of China and renewed hostilities between Israel and Hamas are bullish price drivers.
Global risk premiums rose after Israel launched a new ground operation on Wednesday in Gaza after breaking a ceasefire of nearly two months.
“Amid the prevailing uncertainty, the risk of sanctions is once again coming into focus, as the Trump administration adopts a tougher stance on Venezuela, Iran, and Russia,” J.P. Morgan analysts said in a note on Thursday.
The U.S. kept up air strikes on Houthi targets in Yemen in retaliation for the group’s attacks on ships in the Red Sea. U.S. President Donald Trump has also vowed to hold Iran responsible for future Houthi attacks.
Trump’s push to impose tariffs on Canada, Mexico and China has raised recession fears, weighing on oil prices.
“Tariff concerns seem to be holding oil back a bit,” Flynn, earlier quoted, added.
J.P. Morgan said it anticipates Brent prices to recover into the mid-to-high $70s level over the next couple of months, before dipping below $70 and ending the year in the mid-$60s level, averaging around $73.
This development has had a ripple effect across global markets, causing a surge in crude oil prices.
For Nigeria, a country heavily reliant on movement in Pratts and international crude oil prices, the impact is expected to be severe.
Data gleaned by BusinessDay showed petrol price movements at loading depots on Thursday noon increased to N875 per litre from N852 per litre sold earlier in the day.
Matrix Warri effected an increase of N22 from N852 to N875 per litre, with Zamson Depot raising its price from N853 to N875 per litre. Rainoil depot made the same price change from N853 to N875 per litre, while Pinnacle Warri and Sobaz changed their prices to N875 per litre from N854 and N870, respectively.
This development means Nigerians, who have experienced three petrol price reductions by Dangote Refinery since January, will be bracing for higher prices at the pump.
On Wednesday, the Dangote Group said the suspension of petroleum products’ sale in naira is temporary, citing a mismatch in sales proceeds and crude oil purchase obligations, which are currently denominated in US dollars.
The statement read: “Dear valued customers, we wish to inform you that the Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in naira. This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in US dollars.
“To date, our sales of petroleum products in naira have exceeded the value of naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency.”
Also, the refinery refuted online claims suggesting it halted loading operations due to an incident involving ticketing fraud.
“This is a malicious falsehood. Our systems are robust and we have had no fraud issues. We remain committed to serving the Nigerian market efficiently and sustainably. As soon as we receive an allocation of naira-denominated crude cargoes from NNPC, we will promptly resume petroleum product sales in naira,” the statement said.