Brent crude oil climbed back above $101 per barrel on Tuesday as traders returned to the market following four consecutive sessions of losses with attention shifting to possible diplomatic engagement between the United States and Iran and continuing disruptions to Middle East oil supplies.
Brent crude oil, against which Nigerian crude oil is priced, gained 1.29 percent to $101.63 per barrel during Tuesday trading, reversing part of Monday’s decline.
U.S. West Texas Intermediate crude oil advanced 0.96 percent to $96.70 per barrel, while the more actively traded November contract rose to $93.17.
The recovery follows a sharp retreat that pushed Brent to a 12-day low on Monday as expectations of possible diplomatic progress reduced some of the geopolitical premium accumulated in oil prices.
Brent settled around $100.34 on Monday after falling below $100 during the session, extending a decline from levels above $108 recorded earlier this month.
Tuesday’s recovery shows that traders remain reluctant to push crude substantially lower while physical supply disruptions persist across several important producing regions.
Attention is now focused on the United Nations General Assembly in New York, where developments surrounding relations between Washington and Tehran could influence the direction of energy markets.
U.S. President Donald Trump has indicated that he is open to meeting Iranian President Masoud Pezeshkian, while Iran has separately communicated conditions for returning to negotiations through mediators.
Any credible movement toward negotiations could reduce concerns about a prolonged disruption to Middle Eastern energy supplies.
However, the physical oil market continues to show signs of strain.
Saudi Aramco has increased crude shipments through the Strait of Hormuz after attacks on the kingdom’s East-West Pipeline disrupted some exports through Yanbu on the Red Sea.
Tanker-tracking data showed that about 14 million barrels of Saudi crude were loaded onto seven supertankers inside the Gulf on Sunday as Saudi Arabia moved to maintain exports despite infrastructure disruptions.
The additional shipments have helped restore some supply to international markets, although Middle East exports remain below levels recorded before the latest conflict-related disruptions.
The Strait of Hormuz consequently remains one of the biggest risks facing the crude market.
The waterway handles a significant portion of global petroleum shipments, meaning any deterioration in its security could rapidly affect the availability and cost of moving crude from Gulf producers to international buyers.
Supply concerns have also emerged in Libya.
Production at the Sharara oilfield has fallen by roughly 200,000 barrels per day following the closure of a valve on the pipeline connecting the field to the Zawiya export terminal.
Output at Sharara has consequently declined to between 100,000 and 105,000 barrels per day.
The disruption adds another source of uncertainty to a market already dealing with reduced exports from parts of the Middle East.
Meanwhile, attacks by Yemen’s Iran-aligned Houthis continue to keep Saudi energy infrastructure under pressure, including threats against facilities around Yanbu and other strategic locations.
The competing forces have left oil prices highly sensitive to both diplomatic and military developments.
Greater Saudi exports and credible negotiations between Washington and Tehran could remove more of the risk premium embedded in crude prices.
Further attacks on pipelines, tankers or production facilities could have the opposite effect and quickly send prices higher.
The recent movement illustrates the volatility.
Brent traded as high as $109.45 on September 15 before retreating sharply, falling below $100 during Monday’s session and recovering above $101 on Tuesday.
For Nigeria, Brent remaining above $100 provides stronger potential export earnings and government oil revenue, but prolonged high international energy prices could also increase domestic fuel and transportation costs.
The balance between those effects will depend partly on Nigeria’s production volumes and the extent to which higher international petroleum prices are transmitted into the domestic market.
Traders will now watch developments at the UN General Assembly, Saudi export flows through the Strait of Hormuz and the restoration of disrupted Middle Eastern infrastructure for indications of whether Brent’s return above $101 represents the beginning of another advance or merely a rebound following last week’s steep decline.