Fuel Prices May Fall as crude oil drops below $100 amid progress in US-Iran talks and renewed hopes of reopening the Strait of Hormuz
Fuel prices may decline in the coming days as global crude oil prices plunged below $100 per barrel following positive developments in ongoing peace talks between the United States and Iran.
Also read: LPG price surge nears N2,000/kg sparks fresh outcry
Brent crude fell sharply from about $111 per barrel last week to $97.48 in early trading on Monday, raising expectations that fuel marketers and refiners could review pump prices downward if the trend continues.
The drop followed reports of progress in negotiations aimed at ending months of tensions in the Middle East and reopening the Strait of Hormuz, a strategic shipping route through which about 20 per cent of the world’s oil supply passes.
Industry observers said the latest market movement strengthens expectations that the Dangote Petroleum Refinery could consider a reduction in petrol prices if crude oil continues its downward trajectory.
The PUNCH had earlier projected that a significant fall in oil prices could occur if diplomatic efforts between Washington and Tehran resulted in the reopening of the Strait of Hormuz.
On Sunday, Brent crude traded between $103 and $105 per barrel amid growing optimism over a possible agreement.
The conflict between the United States and Iran had pushed crude prices from below $70 per barrel in February to above $100, with prices exceeding $115 at certain periods. The surge triggered steep increases in fuel costs across many countries.
In Nigeria, petrol prices rose from about N830 per litre to approximately N1,300 per litre during the period.
Diesel and aviation fuel prices also recorded significant increases, prompting concerns among transport operators and airlines.
A major development emerged over the weekend when US President Donald Trump announced that the Strait of Hormuz would be reopened as part of a proposed agreement involving the United States, Iran and several Middle Eastern nations.
Trump disclosed the development on his Truth Social platform after holding discussions with leaders of Saudi Arabia, the United Arab Emirates, Qatar, Pakistan, Türkiye, Egypt, Jordan, Bahrain and Israel.
According to the American president, negotiators had reached an agreement in principle, although final details were still being discussed before a formal announcement.
On Sunday, Trump described the discussions with Iran as “orderly and constructive” and said his administration was not under pressure to conclude negotiations quickly.
Meanwhile, Iran confirmed on Monday that talks with the United States had made encouraging progress but cautioned that a final agreement had not yet been reached.
Iranian Foreign Ministry spokesman Esmail Baqai said negotiators had resolved a substantial portion of the issues under discussion but stressed that claims of an imminent deal would be premature.
The proposed memorandum of understanding reportedly includes a 60-day ceasefire extension, the reopening of the Strait of Hormuz and a framework for future negotiations concerning Iran’s nuclear programme.
Also read: LPG price surge nears N2,000/kg sparks fresh outcry
Analysts said the powerful decline in crude prices reflects growing market confidence that disruptions to global oil supply may ease, potentially creating room for lower fuel prices in Nigeria and other oil-importing nations if diplomatic progress continues.
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