Nigeria’s Bonny Light crude price fell sharply by 14.2 percent to $94.41 per barrel from $110 recorded earlier in the week, following a major shift in global oil market dynamics triggered by a ceasefire announcement by former United States President Donald Trump.
The decline comes amid renewed optimism over stability in global oil supply, as tensions in key shipping routes appeared to ease.
Adding to the downward pressure on prices, Iran assured the international community of safe passage for oil tankers through the Strait of Hormuz, a critical global oil transit route.
The development helped to ease earlier fears of supply disruptions that had driven crude prices to elevated levels in recent weeks.
In the global benchmark market, Brent crude also recorded a drop, falling to about $94 per barrel from $100 per barrel.
Oil marketers expressed optimism that the easing geopolitical tensions would bring stability to the market and moderate price volatility.
Meanwhile, the United States reportedly lifted sanctions on Iranian and Russian oil exports, a move seen as part of efforts to stabilise prices after earlier spikes linked to disruptions in shipments through the Strait of Hormuz.
In a related development, fresh data from the U.S. Energy Information Administration showed that crude oil inventories in the country rose by 3.1 million barrels.
The agency disclosed that commercial stockpiles increased to 464.7 million barrels, representing about two per cent above the five-year average for this period.
Speaking with Vanguard, the Chief Executive Officer of PetroleumPrice.ng, Olatide Jeremiah, said the drop in crude oil prices would likely reduce refining costs globally.
He said, “The drop in crude oil prices will reduce the cost of operations for refiners worldwide. If this trend persists, we should expect lower prices of petroleum products, including Premium Motor Spirit (PMS), also known as petrol. Motorists and transporters currently burdened by high fuel costs and transport fares will also experience relief.”
Despite the potential relief for consumers, Jeremiah warned that Nigeria’s earnings from crude oil could decline due to the price drop, though he downplayed the likely impact.
“Government revenue will also drop because of the relatively low crude oil price. However, this should not pose a significant challenge as long as budget benchmarks are met,” he added.
Nigeria’s 2026 budget is benchmarked at 1.84 million barrels per day, a crude price of $64.85 per barrel, and an exchange rate of ₦1,400 to the United States dollar.