Oil prices fell sharply on Tuesday after renewed optimism over a possible diplomatic breakthrough between Iran and the United States triggered a wave of selling across global crude markets. Brent crude slid toward the $91 per barrel range, reflecting a sudden shift in investor sentiment driven by easing geopolitical tensions.
According to market reports, Brent crude dropped by more than three per cent during intraday trading, while West Texas Intermediate (WTI) declined by nearly four per cent. The downturn followed news that a draft Iran–US peace agreement had been submitted for review in Washington and was described as “preliminarily acceptable,” sparking hopes of reduced conflict risks in the Middle East.
The development quickly weakened the so-called geopolitical risk premium that had supported higher oil prices in recent weeks. Earlier tensions in the region had disrupted market confidence, especially around critical supply routes such as the Strait of Hormuz, through which nearly a fifth of global crude oil shipments pass.
Traders noted that fears of supply disruptions had previously pushed oil prices above $120 per barrel earlier in the year, driven by panic buying and concerns over prolonged instability. The latest decline, however, signals a reversal as markets begin to price in the possibility of improved stability and smoother global oil flows.
In Nigeria, the ripple effects of global oil movements remain significant. While the Nigerian National Petroleum Company Limited has reported strong revenue growth and the Dangote Refinery has benefited from increased exports, households continue to feel the pressure of high fuel costs. Analysts say a sustained drop in global oil prices could eventually ease inflation and lead to cheaper fuel locally, depending on how market conditions evolve.
source: punch