Global oil prices jumped up on Monday following the imposition of tariffs by U.S. President Donald Trump on Canada, Mexico, and China, as the move sparked concerns over potential disruptions in crude supply from the two U.S. neighbours who are its largest oil suppliers.
Reuters reported that by 0656 GMT, U.S. West Texas Intermediate (WTI) crude futures rose by $1.36, or 1.88%, to $73.89 per barrel, while Brent crude futures increased by 73 cents, or 0.96%, to $76.40 per barrel.
On Saturday, President Trump announced sweeping tariffs on goods from Mexico, Canada, and China, escalating trade tensions that could hinder global economic growth and fuel inflation.
The tariffs include 10% on Canadian energy products and a full 25% tariff on Mexican energy exports to the U.S.
U.S. oil refiners anticipate a hike in the price of crude oil from these two countries which contribute one-quarter of crude processed by US refineries, according to the US Energy Information Administration (EIA).
Industry experts warn that the tariffs will increase costs for heavier crude grades essential for optimal refinery production, potentially reducing profitability and forcing production cuts.
Meanwhile, there are concerns that demand may drop which may either cause a reduction in global oil prices or force oil producers to cut production.
Nigerians are subjected to the volatility of the international oil market due to inadequate domestic supply of crude and continued reliance on imports.
Any surge in global oil prices will be felt by Nigerians, as the volatility in the global market persists.