Oil prices edged higher on Monday as investors continued to monitor geopolitical developments in the Middle East, where renewed tensions have kept concerns over potential supply disruptions at the forefront of global energy markets.
Brent crude oil, against which Nigerian crude oil is priced, rose to around $72 per barrel, while U.S. West Texas Intermediate (WTI) crude traded near $70 per barrel.
Although major oil-producing nations have maintained exports, uncertainty surrounding the security of shipping routes through the Strait of Hormuz has continued to support crude prices.
The Strait of Hormuz remains one of the world’s most important energy corridors, with roughly one-fifth of global oil consumption passing through the narrow waterway each day. Any disruption to vessel movements could significantly tighten global supply and increase market volatility.
Market participants are closely watching diplomatic efforts aimed at reducing tensions after recent military exchanges heightened fears of a broader regional conflict. While the immediate risk of supply interruptions has eased somewhat, analysts say the geopolitical situation remains fragile.
Energy producers across the Gulf have continued crude oil and liquefied natural gas (LNG) exports despite heightened security concerns.
Tanker movements through the Strait of Hormuz have largely resumed, although shipping companies remain cautious amid elevated insurance costs and ongoing security assessments.
“The market continues to price in a geopolitical risk premium even as physical supplies remain largely uninterrupted,” analysts noted, adding that any escalation capable of affecting production or shipping infrastructure could quickly drive prices higher.
Beyond geopolitical developments, investors are also weighing global demand prospects. Expectations surrounding economic growth in China, the world’s largest crude oil importer, remain a key factor influencing sentiment, while monetary policy expectations in the United States continue to shape forecasts for fuel consumption.
Recent economic data from major economies has presented a mixed picture, leaving traders divided over the strength of oil demand during the second half of the year. Slower industrial activity in some regions has tempered expectations for consumption growth, even as summer travel supports seasonal fuel demand.
Meanwhile, attention is gradually shifting toward the upcoming meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), where production policy will again come under scrutiny.
The alliance has maintained a cautious approach to supply management in an effort to support market stability while responding to evolving demand conditions.
Analysts believe OPEC+ will continue balancing production increases against geopolitical risks and global inventory levels to prevent excessive price volatility.
Despite the recent recovery, oil prices remain well below the highs recorded earlier during the Middle East conflict as markets increasingly focus on whether supply disruptions actually materialize rather than geopolitical headlines alone.
For now, traders are expected to remain sensitive to developments in the Middle East, shipping activity through the Strait of Hormuz, OPEC+ production decisions, and macroeconomic indicators that could influence the outlook for global energy demand.
As long as geopolitical uncertainty persists, analysts expect oil prices to remain supported, with any significant escalation capable of quickly restoring a stronger risk premium across global energy markets.