Oil prices continued their downward trend on Monday following the signing of a ceasefire agreement between the United States and Iran, a development that has raised hopes of lower petrol prices in Nigeria.
Brent crude, the global oil benchmark, dropped from $87 per barrel on Sunday to $83 per barrel on Monday, according to Oilprice.com. The decline followed the announcement that the United States and Iran had reached an agreement to end months of hostilities and partially reopen the Strait of Hormuz, a key global oil shipping route.
The latest development has fuelled expectations that petrol prices in Nigeria could fall to as low as N900 per litre in the coming days if the peace agreement holds and tensions in the Middle East continue to ease.
The ceasefire deal was announced by US President Donald Trump, who confirmed that both nations had agreed to end the conflict and begin a new phase of negotiations.
The drop in crude prices marks a significant reversal from recent highs. Crude oil had traded above $120 per barrel in April during the peak of the conflict. By Sunday, prices had fallen to about $87 per barrel before dropping further to $83 on Monday.
The US-Iran conflict, which began on February 28, pushed crude prices from below $70 per barrel to above $100 for much of the three-month crisis. At several points, oil prices exceeded $120 per barrel, triggering higher fuel costs across global markets.
Industry observers believe the latest peace deal could reverse that trend and ease pressure on fuel prices worldwide.
According to Reuters, a US official disclosed that a memorandum of understanding was signed by President Trump, Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Qalibaf.
Trump said the full text of the agreement would be released after a formal signing ceremony scheduled for Friday. The United States also confirmed that the agreement includes the immediate reopening of the Strait of Hormuz and the removal of its blockade on Iran.
Reports indicate that the deal extends the ceasefire for a 60-day negotiation period. During this time, both countries are expected to discuss unresolved issues, including the future of Iran’s nuclear programme.
A senior US official also told Reuters that Washington was prepared to release some frozen Iranian funds as a goodwill gesture.
“We are prepared to give these sanctions, and we’ll do some small gestures of that in the beginning. If they make some small gestures to us that show that they’re willing to meet their commitments as well,” the official said.
The source added that any further sanctions relief would depend on Iran’s compliance with the terms of the agreement.
Before the announcement of the deal, a senior Iranian official reportedly said the United States had agreed in principle to release $25 billion in frozen Iranian assets under the draft agreement.
Despite the optimism surrounding falling crude prices, a senior official at Dangote Petroleum Refinery cautioned that an immediate reduction in petrol prices may not occur because the refinery still has stocks of higher-priced crude oil purchased during the conflict.
Nevertheless, many Nigerians are eagerly awaiting a significant reduction in fuel prices as global oil markets respond positively to the easing of tensions in the Middle East.
