Fuel prices could ease in the coming days as global crude oil prices record a sharp decline amid ongoing diplomatic discussions between the United States and Iran over a potential peace deal and reopening of the Strait of Hormuz.
Oil prices fell significantly on Monday morning, sliding from about $111 per barrel last week to $97.48, driven by growing optimism that the talks could restore stability in the Middle East and reopen key oil shipping routes.
The development has raised expectations that petrol, diesel, and aviation fuel prices may reduce if the downward trend in crude oil continues.
Earlier projections suggested that a breakthrough in US–Iran negotiations could trigger a notable fall in global oil prices, especially if the Strait of Hormuz is reopened to full shipping operations.
By Sunday, Brent crude had traded between $103 and $105 per barrel, following positive signals from both sides. However, by early Monday, May 25, prices dropped sharply to $97.48, intensifying speculation of further easing if supply conditions improve.
The Strait of Hormuz remains a critical global energy corridor, handling about 20 percent of the world’s crude oil shipments, making it highly sensitive to geopolitical developments.
Previous Crude Surge Drove Fuel Increases
Crude oil prices had surged after tensions between the United States and Iran escalated on February 28. At the peak of the crisis, prices crossed $100 per barrel and at times exceeded $115.
Before the conflict, crude oil traded below $70 per barrel, but the escalation led to a sharp rise in global energy costs.
In Nigeria, the impact was reflected in fuel prices, with petrol increasing from about ₦830 per litre to approximately ₦1,300 per litre. Diesel and aviation fuel also rose significantly, placing pressure on transport operators and airline companies.
Dangote Refinery and Market Outlook
With crude prices now declining, market watchers have speculated that the Dangote Petroleum Refinery may consider reducing fuel prices if the trend continues.
However, analysts caution that any price cut will depend on several factors, including crude sourcing costs, foreign exchange rates, logistics expenses, and broader market competition in the downstream sector.
Progress in US–Iran Talks
Reports indicate that the United States and Iran have made progress toward a preliminary agreement aimed at reducing tensions and reopening the Strait of Hormuz.
US President Donald Trump said the waterway would be reopened as part of a broader deal involving several countries in the Middle East.
He disclosed this following consultations with leaders from Saudi Arabia, the United Arab Emirates, Qatar, Pakistan, Türkiye, Egypt, Jordan, Bahrain, and Israel.
Trump noted that while discussions were advancing, final details were still being negotiated and would be announced later.
He also described the talks as “orderly and constructive,” adding that negotiators were not rushing the process in order to secure a stable and lasting agreement.
Iran Urges Caution on Agreement Timeline
Iran’s foreign ministry confirmed that negotiations with the United States were progressing but warned that no final agreement was imminent.
Spokesman Esmail Baqai said that while progress had been made on several issues, it was still too early to conclude that a deal was ready for signing.
He stressed that discussions were ongoing and should not be interpreted as an imminent agreement.
His comments followed remarks by US Secretary of State Marco Rubio, who suggested that a deal could potentially be reached soon.
Possible Impact on Global Oil Prices
The proposed agreement reportedly includes a temporary ceasefire extension, reopening of the Strait of Hormuz, and continued negotiations on Iran’s nuclear programme.
If implemented, the deal could ease global supply tensions and push crude oil prices further downward.
For Nigeria, a sustained drop in oil prices may offer relief to consumers who have faced months of rising petrol, diesel, and aviation fuel costs.
However, any reduction in pump prices will depend on domestic market conditions, exchange rate movements, and pricing decisions by fuel importers and refiners.
READ ALSO:
- Airtel, Glo Resume Airtime Lending Services
- Oyo Police Rescue Kidnapped Victim, Kill Three Suspected Kidnappers in Oke-Ogun Operation
- Borno Government Closes Mussa School After 42 Pupils Abducted
- Crude Oil Price Drop Sparks Hope of Cheaper Fuel as US–Iran Talks Advance
- Court Rules Goodluck Jonathan Eligible to Join 2027 Presidential Race
