Nigerian crude prices crash as US and Iran reach peace deal, Strait of Hormuz reopens
By Aboki Forex —
Nigerian crude grades and major oil contracts have fallen sharply after the United States and Iran reached a temporary agreement to end their months long conflict. The peace deal includes reopening the Strait of Hormuz, a vital transit corridor that handles 20 percent of global oil traffic. The announcement sent markets tumbling.
Light sweet crudes such as Bonny Light, Nigeria's flagship grade, and Qua Iboe came under immediate pressure. Prices reacted to the expected return of stranded Middle Eastern oil to the global market.
Nigerian physical crude grades had commanded a premium in recent months as refiners scrambled to replace lost Middle Eastern barrels. Bonny Light, which traded between 100 and 102 dollars per barrel at the end of May, has now fallen back to the 90s. The broader decline in Brent crude is quickly eroding the export premiums on Nigerian oil.
On the domestic front, demand remains firm. The giant Dangote refinery is lifting more Nigerian streams, including Bonny Light, Forcados, and Qua Iboe, to meet its feedstock requirements. The latest dynamics could ease the supply shortage that has shaken global energy markets.