Oil prices tumble after US–Iran deal, Nigeria’s fuel cost remains high

Oil prices tumble after US–Iran deal, Nigeria’s fuel cost remains high

Global oil markets tumbled and equities surged on Wednesday after the United States and Iran struck a fragile, conditional ceasefire deal that includes reopening the critical Strait of Hormuz shipping route.

Brent crude plunged by 13 per cent to $94.80 a barrel, while US-traded crude dropped more than 15 per cent to $95.75—marking one of the sharpest declines since the conflict erupted on 28 February.

Despite the drop, prices remain significantly above pre-war levels of around $70 per barrel.

In Nigeria, this sigh of relief is yet to reflect in the pump price of fuel. Indeed, the last report as of Tuesday night was an increase of five per cent by Dangote Petroleum Refinery in its gantry price of petrol, pushing it to N1,275 per litre, from N1,200 per litre.

The ceasefire—set to last two weeks—offers temporary relief to global energy markets rattled by weeks of disruption. The Strait of Hormuz, a vital artery for global oil shipments, had been under threat after Iran warned it could target vessels in retaliation for US and Israeli airstrikes.

The easing of tensions sent stock markets rallying across Asia. Japan’s Nikkei 225 jumped 5 per cent, South Korea’s Kospi surged nearly 6 per cent, while Hong Kong’s Hang Seng rose 2.8 per cent. Australia’s ASX 200 also gained 2.7 per cent, with US futures pointing to a strong opening on Wall Street.

Announcing the deal on social media, former US President Donald Trump said Washington would suspend military action for two weeks—on the condition that Iran ensures the “complete, immediate, and safe” reopening of the Strait.

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Iran’s Foreign Minister, Abbas Araghchi, signalled Tehran’s willingness to comply, stating that a ceasefire would hold if attacks on Iran stop, adding that safe passage through the strait “will be possible.”

A report by BBC News quotes analysts as saying the move reflects growing pressure on both sides to avoid further economic fallout. Escalation risked driving energy prices even higher, potentially triggering what market watchers describe as a “self-inflicted economic wound.”

With the ceasefire in place, more oil tankers stranded near the strait are expected to resume transit, offering short-term relief. However, experts caution that a full recovery in energy supply remains distant.

Infrastructure damage across the Middle East could take months—if not years—to repair. Iran’s retaliatory strikes have hit key energy facilities, with estimates suggesting reconstruction could exceed $25 billion.

The conflict has already left deep scars on global energy supply chains. In mid-March, strikes on Qatar’s Ras Laffan industrial hub—responsible for roughly a fifth of global liquefied natural gas—cut export capacity by 17 per cent, with full repairs expected to take up to five years.

Asia has borne the brunt of the crisis, given its heavy reliance on Gulf energy supplies. Countries like India, Malaysia and the Philippines scrambled to secure safe shipping routes, while China confirmed that some of its vessels continued to pass through the strait despite the risks.

The economic strain has been severe. The Philippines, which depends on the Middle East for 98 per cent of its oil, declared a national energy emergency after fuel prices more than doubled.

Airlines across the region have also raised fares and cut routes as jet fuel costs soared.

While the ceasefire offers a breather, analysts warn it is far from a lasting solution. Energy production is unlikely to fully rebound until a durable peace agreement is secured—and even then, recovery will take time.

For now, markets are celebrating a pause in hostilities. But beneath the optimism lies a fragile reality: the global energy system remains on edge.

 

Oil prices tumble after US–Iran deal, Nigeria’s fuel cost remains high