By: ThinkBusiness Africa
LAGOS — Global energy markets are entering a period of extreme volatility following a massive joint military operation by the U.S. and Israel against Iranian targets. While official exchanges are closed for the weekend, the shadow market is already signaling a massive price surge when trading resumes Monday morning.
Friday’s closing bells saw Brent crude leap to $72.87 per barrel (pd), and West Texas Intermediate (WTI) to $67.02 pb as the first reports of “Operation Epic Fury” broke. However, with confirmed strikes near the Kharg Island export terminal, analysts warn those prices are now “extinct.”
The Fallout
The strikes, which President Trump described as an effort to “annihilate” Iran’s missile industry and nuclear ambitions, have moved the conflict from a shadow war to a direct confrontation. Reports of explosions near Tehran and the strategic export hub of Kharg Island have sparked fears that Iran’s 3.3 million barrels per day (bpd) of production could be knocked offline indefinitely.
The Chokepoint Crisis
The immediate fear isn’t just lost Iranian barrels, but the Strait of Hormuz. If Tehran follows through on threats to sink tankers or mine the waterway, 20% of the world’s oil supply effectively vanishes overnight. Shipping giants have already begun rerouting vessels, a move that adds massive insurance premiums and transit time to global deliveries.
“Oil prices will see an initial spike when the market opens on Monday… I expect a knee-jerk jump to $80 per barrel if hostilities persist,” said Vandana Hari, CEO of Vanda Insights.
“The worst-case scenario would be if the strikes turn into a protracted war. Then we are talking about potentially 20% of the global supply not finding its way to the markets… only then might we see oil closer to the $100 mark.” Said Amro Zakaria, Global Strategist at Kyoto Network.
In African oil producing economies Nigeria and Angola, are about to see fiscal relief with the jump toward over $80, providing a desperate cash injection for government coffers.
However, all eyes are now on an emergency OPEC+ meeting scheduled for Sunday. If Saudi Arabia and the UAE don’t signal an immediate production hike to cover the Iranian shortfall, traders expect Brent to blow past $85 within minutes of the Asian market open.
