Oil Prices Explained: Supply, War and Shale Drive Crude Market

Oil prices are hard to predict. At the core, the market still runs on supply and demand. As of November 10, 2026, the forces that matter are the same ones that have shaped crude for decades: war, recession fears, OPEC decisions and shale output.

At the pump, crude is not the only cost. Refineries, wholesalers, taxes and station markups all add to the price. Crude often makes up more than half the cost per gallon. When oil jumps, petrol prices usually follow. When oil falls, pump prices often slip more slowly. The pattern is sometimes called 'rockets and feathers'.

What moves the crude price

Futures markets set the price of oil in constant trading. A futures market is an auction where people agree to buy or sell oil in the future. As long as traders exchange contracts, the price keeps changing. Supply and demand news, geopolitics and OPEC+ decisions all feed into it.

U.S. policy also matters because it can affect future supply. In 2025, the Trump administration moved to reopen more than 1.5 million acres in the Coastal Plain of the Arctic National Wildlife Refuge for oil and gas leasing. That reversed the Biden administration's policy of limiting oil drilling in the Arctic.

Shale is another supply lever. Shale is rock that contains oil and natural gas. The more shale the U.S. can access, the more energy is available. Greater supply can make it easier to keep oil prices from spiking.

Brent, WTI and the benchmarks

Brent crude is the main global oil benchmark. West Texas Intermediate, or WTI, is the main benchmark for North America. Brent gives a better picture of global oil performance because it prices a large share of the world's traded crude. It is also the go-to for tracking oil's historical trends. The U.S. Energy Information Administration now relies on Brent as its primary reference in its Annual Energy Outlook.

Oil has never been stable over several decades. The early 1970s brought the first major oil shock when the Middle East slashed exports and placed an embargo on the U.S. and others during the Yom Kippur War. Prices fell in the mid-1980s due to lower demand and an influx of non-OPEC oil producers. Prices surged again in 2008 as global demand grew, then crashed alongside the global financial crisis. During the 2020 COVID lockdown, oil demand plummeted and prices fell below $20 per barrel.

Why it matters for Nigeria

The U.S. keeps a Strategic Petroleum Reserve for emergencies such as sanctions, catastrophic storm damage or war. It can cushion supply shocks, but it is not meant to solve long-term problems. It provides quick relief for consumers and keeps essential industries, emergency services and public transit moving.

Oil and natural gas are linked. If oil prices rise, some industries may swap natural gas for parts of their operations where possible. That raises demand for natural gas.

For Nigerian consumers and businesses, crude prices feed into energy and logistics costs. When oil is expensive, everyday items can cost more because shipping and utilities rise. That pressure can reach the naira through import and transport costs, even as oil export earnings matter for Nigeria.