Nigerian Oil Prices Drop Below $95 as US-Iran Ceasefire Opens Strait of Hormuz

Nigerian oil prices tumbled below $95 per barrel on Wednesday following news that Iran agreed to a temporary ceasefire with the United States, reopening the Strait of Hormuz for two weeks. The strategic waterway is critical for nearly 20% of global oil supply, and its reopening immediately eased fears of prolonged disruptions in the energy market. Major global benchmarks, including Brent crude and WTI, fell by over 15% at the time of reporting.

The fall in prices comes after months of volatility triggered by the Middle East conflict between the US and Iran. Nigeria’s Bonny Light crude, which had seen a surge during the height of the tensions, also felt the impact as traders recalibrated supply expectations. Analysts note that the temporary truce provides short-term stability but highlights the fragility of global energy markets in politically sensitive regions.

The ceasefire agreement was announced by US President Donald Trump, who revealed that Iran would allow “complete, immediate, and safe” passage through the Strait of Hormuz in exchange for a two-week suspension of US military actions. Iranian Foreign Minister Abbas Araghchi confirmed that Iran’s armed forces would halt defensive operations during this period, allowing coordinated transit and setting the stage for further negotiations.

International diplomacy played a key role, with Pakistan mediating talks between Washington and Tehran. Pakistani Prime Minister Shehbaz Sharif called for a two-week extension of the ceasefire to allow diplomacy to run its course, urging all parties to maintain calm in the region. Meanwhile, Israel has reportedly supported the temporary truce, although some Gulf states reported ongoing attacks, leaving uncertainty over the exact timing of the agreement’s implementation.

Market watchers see the developments as a relief after weeks of uncertainty that had driven crude prices higher. Brent crude dropped to its lowest level in nearly six years just before Trump’s announcement, reflecting the sensitivity of oil markets to geopolitical shifts. With negotiations scheduled to continue in Islamabad, hopes for a broader, more durable resolution could stabilize prices further and reduce the risk of future disruptions to global energy supplies.

source: nairametrics