KEY POINTS
- Oil fell from about $111 to $97 on hopes of a US-Iran peace deal.
- Nigerian petrol had risen from N830 to about N1,300 a litre during the conflict.
- A deal would reopen the Strait of Hormuz, which carries 20 percent of global oil.
Nigerian fuel prices could fall in the coming days as global oil prices tumble on hopes of a US-Iran peace deal. Crude slid from about $111 last week to $97 on Monday morning. Moreover, traders expect petrol to follow if the deal reopens the Strait of Hormuz.
Why fuel prices could ease
Oil has dropped sharply as Washington and Tehran edge toward ending their months-long conflict. Specifically, Brent hovered between $103 and $105 on Sunday before sliding to $97.48 early Monday. Therefore, analysts say cheaper crude should eventually filter through to fuel prices, since oil is the main input for petrol.
The war had pushed prices the other way. Crude had traded below $70 before the conflict began on February 28, then climbed above $100 and past $115 at its peak. Consequently, fuel costs jumped worldwide, and Nigerian petrol rose from N830 a liter to about N1,300. Since Nigeria removed its fuel subsidy in 2023, pump prices have tracked global crude and the naira far more closely than before.
Eyes on Dangote and the Strait of Hormuz
The pain spread beyond petrol. Diesel and aviation fuel also surged, and airlines warned they might ground flights. Now, with crude falling, speculation has grown that the Dangote Petroleum Refinery could cut its petrol price. The refinery, Africa’s largest, has reshaped local supply, so its pricing now sways what motorists pay. However, no operator has confirmed a reduction yet. Cheaper crude is a mixed blessing for Nigeria, since the country exports oil and leans on it for most of its foreign earnings. So a sustained slide could ease fuel prices for motorists while denting government revenue.
Much hinges on the Strait of Hormuz, the waterway that carries about 20 percent of the world’s oil. According to US President Donald Trump, a proposed deal would reopen the strait as part of a wider agreement involving Iran and several Middle Eastern states. Indeed, Trump said negotiators had agreed the pact and were awaiting final details after his calls with leaders across the region.
A deal not yet sealed
Iran struck a more cautious note. Specifically, its foreign ministry spokesman Esmail Baqai said the two sides had settled “a large portion of the issues,” but warned that a signed agreement was “not imminent.” Meanwhile, Trump said the talks were moving in an “orderly and constructive manner” and urged his team not to rush.
Reports say the draft deal includes a 60-day ceasefire extension, the reopening of the Strait of Hormuz, and a framework for fresh talks over Iran’s nuclear program. Together, those terms could calm the oil market further. Still, until the two sides sign a deal and reopen the strait, Nigerian drivers may wait a while before relief reaches the pump.
