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Brent Crude Fall 7% as U.S.-Iran Talks Resume
Global oil prices fell sharply on Monday after U.S. President Donald Trump signaled a pause in military action against Iran, raising hopes of renewed diplomatic talks.
Brent crude futures dropped 7 per cent to $82 per barrel, while Nigerian crude slipped from above $85, as markets reacted to the easing of geopolitical tensions.
Trump’s decision followed appeals from regional allies, including Saudi Arabia and the UAE, to pursue peace rather than escalation.
“The administration would not authorize a planned military strike against Iran,” Trump said, noting that consultations with aides and partners were ongoing. The move immediately reduced the risk premium that had driven oil prices higher in recent weeks.
Analysts said the prospect of reopening the Strait of Hormuz to unhindered shipping helped calm supply fears.
Refiners in Asia and Europe had previously scrambled for non-Gulf crude, temporarily boosting demand for Nigerian grades. With transit routes expected to normalize, traders anticipate a swing from supply concerns to surplus worries.
For Nigeria, the price drop carries mixed implications. Lower crude prices mean reduced foreign exchange earnings and budget shortfalls, as oil remains the country’s primary source of revenue.
Every $1 decline translates into billions of dollars lost to government coffers, adding pressure on the central bank’s reserves and the foreign exchange market.
However, cheaper crude feedstock could benefit citizens. Falling landing costs for importers and lower refining expenses at the Dangote Refinery may translate into cheaper petrol at the pumps.
