Global oil prices dropped below the $100 mark on Wednesday following a ceasefire announcement between the United States and Iran, signaling a possible de-escalation of tensions in the Middle East region.
The ceasefire, announced by Donald Trump, is expected to last for two weeks and is tied to conditions including the safe reopening of the Strait of Hormuz, a critical route for global oil shipments.
In early trading, West Texas Intermediate (WTI) crude fell by about 14 percent to approximately $96 per barrel, while Brent crude declined by nearly 13 percent to around $95 per barrel. The drop follows earlier price surges that saw oil exceed $105 per barrel amid fears of conflict disrupting supply.
Iranian authorities confirmed their willingness to halt hostilities, provided attacks against the country cease and maritime operations are conducted under agreed conditions.
Market analysts say the easing of geopolitical tensions has reduced concerns over supply disruptions, prompting a swift reaction in global oil markets.
For Nigeria, the development could have significant implications for domestic fuel prices. Recent increases linked to rising crude costs pushed petrol prices above ₦1,200 per litre, with consumers in some areas paying as much as ₦1,350.
Experts note that while the decline in crude prices may lead to lower fuel costs, the impact will depend on local market conditions, including refining expenses and exchange rates.
The situation remains uncertain as the ceasefire is temporary, and any breakdown in the agreement could trigger renewed volatility in global oil prices.