The price of petrol and other petroleum products in Nigeria are expected to drop drastically following the landmark peace agreement between the United States and Iran that will reopen the strategic Strait of Hormuz.
Recall that the Federal Government, Dangote Petroleum Refinery, and other major stakeholders within and outside the country have attributed the sharp rise in oil prices to the Middle East tensions that halted crude flows through one of the world’s most sensitive oil shipping corridors.
Nigeria is affected because its downstream sector is deregulated and domestic fuel prices are tied to global market forces.
However, depot fuel prices across Nigeria are expected to come under downward pressure as international crude prices crash following agreement reached by US and Iranian officials to end their war and reopen the Strait of Hormuz, a preliminary pact that sent oil prices falling but leaves the fate of Tehran’s nuclear programme to further negotiations.
While still a framework, the deal marked the biggest breakthrough towards resolving the conflict that has killed thousands and upended energy markets since it began with joint U.S.-Israeli strikes on Iran in February.
Few of the details were made public, but US President Donald Trump said the Strait of Hormuz — a key conduit for global oil supplies — would reopen after the planned signing of the deal on Friday.
“The Deal with the Islamic Republic of Iran is now complete,” US President Donald Trump posted Sunday on social media as he marked his 80th birthday.
Trump said the Strait of Hormuz, a major shipping route for global oil and gas supplies that Iran has effectively shut down for months, would open on Friday, and that he had ordered the end of the U.S. blockade of Iranian ports.
“Ships of the World, start your engines. Let the oil flow!” Trump wrote.
This geopolitical breakthrough has triggered a sharp crash in international oil prices, with Brent crude tumbling below $84 per barrel.
The reopening of the Strait of Hormuz following a ceasefire in the Middle East is expected to calm global oil markets and ease petrol prices, although experts say Nigerians may not experience immediate relief at the pumps.
Analysts note that while declining global crude oil prices could influence Nigeria’s downstream petroleum market, pump prices are more likely to reduce gradually, potentially settling around ₦1,000 per litre if market forces are fully allowed to operate.
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