Oil Prices Extend Losses as US-Iran Deal Hopes Rise, Nigeria Still Riding $110 Bonanza
By Aboki Forex —
Nigerian crude and major oil contracts have now fallen for four consecutive days, dropping nearly 6% to trade around $105 per barrel. The slide comes as easing supply concerns boost optimism over a potential US-Iran agreement.
According to a US official quoted by Axios, a deal involving a 60-day extension of the ceasefire between the US and Iran is close to being signed. Under the proposed terms, Iran would agree to remove mines it placed in the Strait of Hormuz and allow ships to travel freely. In return, the United States would end its blockade of Iranian ports.
President Trump posted on social media that he advised his representatives “not to rush into a deal,” which slightly dampened expectations. A senior US administration official added that the agreement would not be signed on Sunday, even though progress has been made.
The deal would see Iran give up its enriched uranium, reopen the Strait of Hormuz, and end the conflict. It would begin with a 60-day ceasefire extension during which nuclear talks continue and traffic through the Strait resumes. Iranian news agency Tasnim reported that if a deal is reached, the number of ships passing through the Strait could return to pre-war levels in 30 days.
Israeli Prime Minister Netanyahu stressed that “any final agreement with Iran must eliminate the nuclear danger,” even though the agreement would end the conflict between Israel and Hezbollah. Esmai, a spokesperson for Iran’s Ministry of Foreign Affairs, also commented on the talks.
About one-fifth of the world’s oil and liquefied natural gas travels through the Strait of Hormuz. Reopening it would greatly ease pressure on major Asian economies and cause oil prices to drop sharply. Earlier, the conflict and a double blockade severely disrupted energy markets, forcing Middle Eastern producers to shut down millions of barrels of crude output per day.
However, Reuters reported, citing Iran’s Tasnim news agency, that the US government is still blocking some sections of the deal, including the release of blocked Iranian assets. US Secretary of State Marco Rubio highlighted that while there is regional support for an agreement with Iran, a comprehensive nuclear deal cannot be done quickly or carelessly.
For Nigeria, the structural forces driving crude prices are a mix of external pricing bonanza and internal supply constraints. The extra N5.13 trillion in windfall revenue from market prices averaging around $110 has enabled Nigeria to pay down domestic debt, defend the Naira (stabilizing around N1,365/$ to N1,375/$), and build a fiscal buffer.
Upstream recovery is picking up but continues to battle legacy infrastructure challenges. Production rose to an average of 1.49 million barrels per day in Q2, compared to roughly 1.35 million per day in Q1. That figure is still below Nigeria’s OPEC+ quota of 1.50 million per day and the internal 2026 budget target of 1.84 million barrels per day. The surge in revenue is purely price-driven, with volume output remaining limited by localized pipeline security and technical constraints.
Nigeria is in a sweet spot with global oil prices well over $110 a barrel, which is offsetting lower-than-targeted domestic production.