Oil prices drop on gresh US-Iran talks, raising hopes for petrol price relief in Nigeria

Global oil prices declined further on Thursday following reports of progress in diplomatic negotiations between the United States and Iran, sparking fresh expectations of possible reductions in petrol prices in Nigeria.

Brent crude slipped to about $93 per barrel from roughly $95 recorded a day earlier after reports indicated that Washington and Tehran were nearing a 60-day understanding aimed at sustaining a ceasefire and reopening talks on Iran’s nuclear programme.

According to Axios, US and Iranian negotiators have reportedly agreed on the framework of the proposed deal, although final approval from United States President Donald Trump was still pending, while Iranian authorities had yet to formally confirm acceptance of the arrangement as of Thursday.

The report stated that the proposed agreement would guarantee unrestricted movement of vessels through the Strait of Hormuz, a strategic global oil shipping route that has experienced rising tensions in recent months.

It added that the deal could also involve gradual easing of the US naval blockade, sanctions waivers allowing Iran to resume unrestricted oil exports, and negotiations on broader sanctions relief alongside humanitarian support measures.

The diplomatic progress quickly affected the international oil market as investors reacted positively to the possibility of improved crude supply and reduced geopolitical uncertainty in the Middle East.

The decline in crude prices has renewed hopes among many Nigerians that domestic petrol prices may ease if the downward trend in the global oil market continues.

Nigeria, despite being Africa’s largest oil producer, remains heavily affected by fluctuations in international crude prices and foreign exchange rates. Petrol prices have remained high in recent months following the removal of fuel subsidies and the deregulation of the downstream petroleum sector.

The recent tensions between the US and Iran had earlier pushed crude prices upward, forcing refiners and marketers, including the Dangote Petroleum Refinery, to adjust petrol prices.

Industry analysts have consistently maintained that movements in global crude oil prices directly impact fuel pricing in Nigeria.

The Strait of Hormuz is regarded as one of the world’s most critical oil transit corridors, accounting for a large share of global crude exports. Any reduction in tensions around the route is usually seen as positive for global energy stability and supply.

Axios quoted a US official as saying, “This is an agreement to get everybody to the table. We will work out the details in the negotiations.”

The report further stated that both countries are expected to use the proposed 60-day negotiation period to discuss issues surrounding Iran’s enriched uranium stockpile, sanctions relief, oil exports, and the release of frozen Iranian assets.