Crude oil prices rising above $100 per barrel could soon translate into higher fuel prices across West Africa, according to James Gooder, vice president for crude markets in Europe and Africa at Argus Media.
Oil markets have surged in recent days amid fears that conflict involving Iran, Israel and the United States could disrupt shipping through the Strait of Hormuz, one of the world’s most critical oil transit routes.
Prices briefly jumped close to $120 per barrel earlier in the week before easing, but remain well above recent levels.
“At one point this morning the price went from just under $100 to almost $120 in about twenty minutes,” Gooder said in an interview with JoyNews research analyst Caleb Ziblim.
The volatility reflects growing uncertainty in global oil markets as traders assess how long the conflict could affect supply flows from the Gulf.
For countries across West Africa, the immediate impact is likely to come through higher fuel import costs.
Despite producing crude oil, many economies in the region still rely heavily on imported refined petroleum products such as petrol and diesel.
“The problem is usually double,” Gooder said. “You have the foreign exchange pressures on one side and then the cost of the product on the other.”
Countries such as Ghana and Nigeria export crude but still import a large share of their refined fuel needs, exposing local markets to global price swings.
While new refining capacity in the region, including the Dangote Refinery in Nigeria and efforts to revive the Tema Oil Refinery in Ghana, could reduce dependence on imports, demand for fuel across West Africa continues to grow rapidly.
As a result, international market prices still play a major role in determining what consumers ultimately pay at the pump.
Beyond price volatility, Gooder said the region’s oil markets also face a long-standing challenge of limited pricing transparency.
Crude trading in West Africa is often opaque, with limited publicly available information on cargo prices and transactions. That lack of transparency can make it harder for buyers, sellers and regulators to determine fair market value.
“Our job is getting information on opaque markets and making it available to the wider market,” Gooder said.
To address this gap, Argus Media has developed pricing assessments and trading platforms aimed at improving price discovery for West African crude grades such as Jubilee from Ghana and Forcados from Nigeria.
The goal, according to Gooder, is to narrow the gap between buyers and sellers in a market where information is often closely guarded.
“More information is better for everyone,” he said. “It helps buyers and sellers meet at a price where the true value of the crude is understood.”
Greater transparency in crude and product markets could become increasingly important as oil price volatility feeds through to domestic fuel prices across the region.
If global crude prices remain elevated and disruptions around the Strait of Hormuz persist, analysts say the effects could ripple quickly through fuel markets in West Africa, potentially triggering another round of price increases for consumers.
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