Oil slumps 14% to $94.41 per barrel on US-Iran ceasefire

By Udeme Akpan

The price of Nigeria’s Bonny Light crude has dropped by 14.2 per cent to $94.41 per barrel from $110 per barrel on Tuesday in the global oil market, following the announcement of a two-week ceasefire by Donald Trump.

Iran also indicated it would ensure the safe passage of oil tankers through the Strait of Hormuz, easing supply concerns that had previously driven prices upward.

Similarly, the price of Brent crude fell to about $94 per barrel from $100 per barrel, as marketers expressed optimism over improved market stability.

Meanwhile, the United States has reportedly lifted sanctions on Iranian and Russian oil exports, largely in response to earlier price surges triggered by prolonged disruptions to shipments through the Strait of Hormuz.

In another development, crude oil inventories in the United States rose by 3.1 million barrels, according to new data from the U.S. Energy Information Administration.

The agency said the increase brings commercial stockpiles to 464.7 million barrels, about two per cent above the five-year average for this period.

Speaking with Vanguard, Chief Executive Officer of PetroleumPrice.ng, Olatide Jeremiah, said the decline in crude oil prices would lower operational costs for refiners globally.

“The drop in crude oil prices will reduce the cost of operations for refiners worldwide. If this trend persists, we should expect lower prices of petroleum products, including Premium Motor Spirit (PMS), also known as petrol. Motorists and transporters currently burdened by high fuel costs and transport fares will also experience relief,” he said.

He, however, noted that Nigeria’s revenue could decline due to the lower crude oil prices, though he downplayed the impact.

“Government revenue will also drop because of the relatively low crude oil price. However, this should not pose a significant challenge as long as budget benchmarks are met,” he added.

Nigeria’s 2026 budget is benchmarked at 1.84 million barrels per day, $64.85 per barrel, and an exchange rate of N1, 400 to the US dollar.