Global crude oil prices recorded a steep decline on Monday following a peace agreement between the United States and Iran, bringing an end to more than two months of hostilities that disrupted global energy markets and fuelled inflationary pressures across several economies.
Brent crude, the international benchmark for oil, dropped by nearly four per cent to trade at $79.50 per barrel as of 9:54 a.m. Nigerian time.
An analysis of market data showed that Brent crude, which opened at $80.24 per barrel on Sunday, climbed briefly to about $81 before declining steadily to $79.39, its lowest level within the last 24 hours.
The sharp decline followed Sunday’s announcement by Washington and Tehran that they had agreed to end the conflict between the two countries.
The agreement also effectively halted the war between Israel and Iran and brought an end to Israeli military operations in Lebanon.
The peace deal, reportedly brokered by Pakistan alongside several Middle Eastern countries, paves the way for the full reopening of the Strait of Hormuz, one of the world’s most strategic oil transit routes through which roughly 20 per cent of global crude oil supplies are transported.
The strait had remained closed since the outbreak of hostilities on 28 February, when the United States and Israel launched military operations against Iran.
The disruption triggered significant volatility in global oil markets, pushing Brent crude above the $100-per-barrel threshold and driving energy costs to multi-year highs.
The surge in crude prices led to corresponding increases in the prices of refined petroleum products, including petrol, diesel and aviation fuel, across several countries.
In Nigeria, the spike in international oil prices translated into higher domestic fuel costs, triggering concerns among consumers, transport operators and businesses already grappling with rising living expenses.
As global crude prices fluctuated during the crisis, Dangote Refinery adjusted its ex-depot prices several times to reflect changing market conditions.
Petrol, which sold for about N870 per litre before tensions escalated in the Middle East, now retails for approximately N1,350 per litre or higher in many major Nigerian cities.
The increase in fuel prices contributed to higher transportation fares and pushed up the cost of food, goods and services across the country.
The crisis also prompted governments around the world to introduce measures aimed at shielding their economies and citizens from the impact of rising energy costs.
With the conflict now officially ended and the Strait of Hormuz reopened, analysts expect global oil prices to moderate further in the coming weeks.
A sustained decline in crude prices could eventually translate into lower petrol prices and reduced energy costs in Nigeria and other oil-importing economies.