RismadarVoice Reporters
September 18, 2026
JP Morgan says it can no longer establish a clear baseline outlook for the global oil market as the prolonged US-Israeli conflict with Iran continues to disrupt supplies, weaken demand and reshape international energy flows.
The bank said uncertainty over how the conflict could end, combined with continuing risks to major shipping routes and energy infrastructure, had made forecasting increasingly difficult.
Oil prices have climbed above $100 per barrel, while JP Morgan estimated Brent crude’s fair value for September at about $90 per barrel, compared with market prices near $106.
The gap, according to the bank, suggests traders are attaching a significant risk premium to the possibility of additional supply disruptions beyond the estimated 10 million barrels per day already affected.
Energy costs have also risen sharply for American consumers. JP Morgan said US gasoline had reached about $4.37 per gallon, while diesel climbed to a record $6.31 per gallon ahead of winter.
DEMAND FALL HELPS ABSORB SUPPLY SHOCK
Despite the scale of the disruption, crude prices have not risen as dramatically as might ordinarily be expected from such a large supply loss.
JP Morgan said the market has adjusted largely through weaker consumption rather than relying heavily on inventories.
Global oil demand has been running about 4.4 million barrels per day below year-earlier levels, helping offset supply losses.
Meanwhile, global inventories of crude oil and refined products have fallen by approximately 555 million barrels since the conflict began — only about one-third of the decline the bank had previously projected.
Brent crude has consequently averaged around $94 per barrel since the conflict started.
WHAT HIGHER OIL PRICES MEAN FOR NIGERIA
For Nigeria, sustained crude prices above $100 create a mixed market picture because the country is both a major crude producer and exposed to international prices for petroleum products and other energy-related imports.
Higher crude prices can increase the value of Nigeria’s oil exports and potentially strengthen petroleum-related government receipts, provided production and export volumes remain strong enough to capture the higher prices.
But the same global energy shock can increase the cost of imported refined products and other dollar-denominated inputs, particularly where domestic supply is insufficient to meet demand.
The impact on petrol prices is not determined by crude prices alone. Exchange rates, refining costs, freight, distribution margins, domestic refinery output and government pricing arrangements can also influence what Nigerian consumers eventually pay.
The prolonged disruption of Middle Eastern shipping routes could therefore matter to Nigeria beyond the headline price of crude, especially if higher freight and insurance costs feed into the cost of imported goods and petroleum products.
At the same time, changes in global crude flows could create opportunities for Nigerian barrels if refiners seek alternative supplies outside disrupted Middle Eastern routes. The extent of any benefit would depend on demand for Nigerian crude grades, production levels and export availability.
SHIPPING ROUTES REMAIN A MAJOR RISK
JP Morgan highlighted continuing threats to global energy flows, including disruption around the Strait of Hormuz, risks to shipping through the Bab el-Mandeb Strait, and attacks affecting Saudi export routes.
Substantial inventories remain available in major consuming economies, particularly China, Europe, Japan and South Korea, providing a buffer against further disruption.
But if Middle East supply losses persist and inventories decline further, the bank said crude prices could face renewed upward pressure later in the year.
For Nigeria, the direction of the market will therefore be important on both sides of the economy: higher crude prices could improve the value of oil exports, while prolonged increases in global energy and shipping costs could add pressure to domestic fuel, transportation and import costs.
The International Energy Agency expects global oil supply and demand to weaken more sharply than previously projected, while OPEC still forecasts demand growth of about 380,000 barrels per day in 2026.
JP Morgan’s assessment suggests that available inventories may contain prices for now, but the duration of the Middle East disruption remains the central uncertainty for the global oil market — and for oil-dependent economies such as Nigeria.
