The price of Brent crude, the grade against which Nigeria’s crude oil is benchmarked, has crossed $70.
The US West Texas Intermediate (WTI) was also trading at $66.88 per barrel.
Crude oil prices were jolted after Saudi Arabia’s oil port and Aramco’s residential area was targeted by a drone and ballistic missile on Sunday.
An official at the Saudi Arabian ministry of energy confirmed that one of the petroleum tank farms at Ras Tanura Port was targeted by a drone coming from the sea.
Ras Tanura is one of the world’s largest oil shipping ports.
Shrapnel from a ballistic missile also fell near Saudi Aramco’s residential area in Dhahran where thousands of the company’s employees and their families live.
The attack has been claimed by Huthi, a rebel group from Yemen.
Explaining the attempted attack, Turki Al-Maliki, the Saudi Arabian minister of defence, said: “This is in reference to the statement issued by the ministry of energy in regards to the failed attempted targeting of one of the petroleum tank farms in Ras Tanura Port in the Eastern Province using a bomb-laden drone that came from the sea, and the attempt to target Aramco facilities in Dhahran”.
“Those failed attempts did not target the Kingdom of Saudi Arabia’s security and economic assets, but the core of the global economy and its oil supplies, as well as the security of global energy.
“The attacking bomb-laden drone that came via the sea was intercepted and destroyed prior to reaching its target. The ballistic missile that was launched to target Aramco facilities in Dhahran was intercepted and destroyed as well. The interception resulted in scattered debris that fell in close proximity to civilians and civilian objects.”
In March 2020, the federal government announced that a price modulation system where retail petrol price is adjusted to mirror price movement in the international oil market meaning that an increase in crude oil prices.
The recommended retail price is announced periodically by the Petroleum Products Pricing Regulatory Agency (PPPRA).
At the time, the federal government had said it could no longer pay the huge amount of money required to subside petrol.
However, the last price review was in November when crude oil was in the $40s region.
To avert industrial action after opposition by labour unions, the federal government reduced petrol price by N5 and set up a technical committee to fashion out a mechanism to monitor and stabilise petrol pump price.
The inaction from the government in response to crude oil prices could mean that Nigeria has returned to the era of subsidy.
