Fuel Price Drop Looms as Crude Oil Falls Below $100 Amid US-Iran Peace Talks

Fuel prices in Nigeria may soon decrease as global crude oil prices continue to fall, driven by ongoing peace negotiations between the United States and Iran.

Oil prices tumbled from $111 last week to $97.48 on Monday morning, fuelling expectations of a possible reduction in petrol, diesel, and aviation fuel costs especially if the strategic Strait of Hormuz is reopened.

The PUNCH had earlier predicted a major oil price drop if the US and Iran reached an agreement to reopen the waterway, through which approximately 20% of global oil passes. On Sunday, Brent crude traded between $103 and $105 amid positive signals from both nations. By Monday, prices had sharply fallen to $97.48.

Crude oil, the primary input for fuel production, had surged from below $70 to over $100 and briefly beyond $115 since the US-Iran conflict began on February 28.

In Nigeria, this spike pushed petrol prices from N830 to N1,300 per litre, while diesel and aviation fuel costs also rose sharply, prompting airline operators to threaten service suspensions.

With crude prices now trending downward, speculation is growing that the Dangote Petroleum Refinery may consider reducing its petrol prices.

Reports indicate the US and Iran have reached a preliminary agreement to wind down the conflict. US President Donald Trump announced on Saturday that the Strait of Hormuz would be reopened as part of a proposed deal involving the US, Iran, and several Middle Eastern nations.

Trump shared the news on Truth Social after calls with leaders from Saudi Arabia, the UAE, Qatar, Pakistan, Türkiye, Egypt, Jordan, Bahrain, and Israel.

While Trump noted that an agreement had been negotiated subject to finalisation, he added that final details were still being discussed. On Sunday, he described the talks with Iran as “proceeding in an orderly and constructive manner” and said he had instructed his representatives not to rush into a deal.

Iran confirmed on Monday that some progress had been made in the talks, but cautioned that an agreement was not imminent.

Foreign ministry spokesman Esmail Baqai stated, “It is correct to say that we have reached a conclusion on a large portion of the issues under discussion. But to say that this means the signing of an agreement is imminent, no one can make such a claim.”

The proposed memorandum of understanding reportedly includes a 60-day ceasefire extension, the reopening of the Strait of Hormuz, and a framework for further negotiations over Iran’s nuclear programme.