Brent Crude Drops Over 5% as Strait of Hormuz Talks Raise Hope for Cheaper Petrol in Nigeria
By Aboki Forex —
Global crude prices fell sharply on Monday, with Brent dropping over 5% as optimism grew over a possible reopening of the Strait of Hormuz. The United States and Iran are currently in diplomatic talks, hoping to reach an agreement. Brent crude settled at $98.17 per barrel, down 5.19%, while West Texas Intermediate fell 5.54% to $91.25 per barrel, according to Oilprice.com.
The Strait of Hormuz is one of the world's most vital oil shipping routes, handling nearly a fifth of global supply. Any reduction in tension around the waterway lowers the “risk premium” in crude prices. Analysts say this could bring some relief to petrol prices in Nigeria in the coming weeks.
Saul Kavonic, head of energy research at MST Financial, told the BBC: “There is now some light at the end of the tunnel, which will bring some near term oil price relief. But even in the most optimistic scenario, oil markets will remain tight through 2027 given the time required to normalise oil flows through the Strait, repair damaged oil facilities, and rebuild global oil stocks that have seen record depletion since the war began.”
Despite the drop in global crude, depot petrol prices in Nigeria remain varied. In Lagos, Premium Motor Spirit (PMS) was sold at an average of N1,277 per litre on Friday. Automotive Gas Oil (AGO) traded around N1,802 per litre. In Warri, PMS averaged N1,285 per litre, while AGO was N1,805 per litre. Port Harcourt depots sold AGO at about N1,810 per litre, and Calabar depots priced PMS at N1,290 per litre.
Traders say the price differences across regions reflect transport and logistics costs as well as varying supply levels at different depots. If crude prices continue to ease, pump prices could see a downward review, market analysts said. But they added that this depends on a stable exchange rate and better supply dynamics. A Lagos-based fuel importer said: “Cargoes in the system were purchased at high costs, so adjustments would occur gradually.”
Nigeria's fuel prices remain sensitive to global crude market conditions, currency exchange rates, and import costs, even with increased refining capacity from the Dangote Refinery and other plants. Earlier, NNPC retail outlets in Lagos adjusted pump prices downward. Checks at Egbeda and Ipaja filling stations showed PMS sold between N1,300 and N1,315 per litre, below the official N1,320 price.