Global oil prices declined on Thursday following fresh diplomatic progress between the United States and Iran, raising hopes of a possible reduction in petrol prices in Nigeria if the trend continues.
Brent crude fell to about $93 per barrel from nearly $95 recorded on Wednesday after reports emerged that Washington and Tehran were close to finalising a 60-day memorandum of understanding aimed at extending their ceasefire and reopening negotiations on Iran’s nuclear programme.
According to reports, negotiators from both countries reached a framework agreement, although US President Donald Trump had yet to grant final approval while Iran had not officially confirmed acceptance of the proposal as of press time.
The proposed agreement is expected to guarantee unrestricted shipping through the Strait of Hormuz, one of the world’s most strategic oil transit routes that has experienced heightened tensions in recent months.
Reports also indicated that the deal could include phased easing of the US naval blockade, sanctions waivers to allow Iran resume oil exports, and broader discussions on sanctions relief and humanitarian support.
The easing of tensions between the two countries immediately affected the global oil market, with traders reacting positively to expectations of improved crude supply and reduced geopolitical risks in the Middle East.
The latest decline in crude prices has renewed expectations among Nigerians that local petrol prices could drop in the coming weeks, especially if the downward trend in the international oil market persists.
Despite being a major oil-producing nation, Nigeria remains highly vulnerable to fluctuations in global crude prices and foreign exchange rates. Petrol prices have remained elevated since the removal of fuel subsidies and deregulation of the downstream petroleum sector.
Industry experts have repeatedly stated that international crude oil prices significantly influence local fuel pricing, including refinery and depot costs.
The Dangote Petroleum Refinery had earlier adjusted petrol prices upward following the escalation of tensions between the United States and Iran, which pushed global oil prices higher.
The Strait of Hormuz handles a substantial portion of global crude exports, making stability around the corridor crucial for global energy supply.
A US official familiar with the negotiations reportedly described the proposed arrangement as “an agreement to get everybody to the table,” adding that detailed negotiations would continue during the 60-day window.
The talks are also expected to address Iran’s uranium enrichment activities, sanctions relief, and the possible release of frozen Iranian assets.
