Brent crude oil has fallen to its lowest level since before the outbreak of the Iran war, as more tankers resume movement through the Strait of Hormuz and fears of supply disruption ease.
The drop comes after weeks of market volatility that pushed fuel costs higher globally.
For Nigerians, the development offers a glimmer of hope that petrol pump prices could begin to ease in the coming weeks.
Already, price drops have began to be noticed in some parts of Lagos and Ogun states, as petrol sells for between N1210 and N1230 per litre in some filling stations.
Since Nigeria’s refined fuel prices are closely tied to global crude benchmarks and foreign exchange rates, the understanding among most Nigeeians is that sustained decline in Brent should reduce the landing cost of imported fuel and give the government more room to stabilize retail prices.
But Dangote Refinery and other marketers have continued to footdrag, when it comes to price reductions, but quick at increasing prices anytime opportunity for such comes up.
Energy analysts note that if the current trend holds and the naira remains stable, consumers may start to see gradual reductions at filling stations.
While deregulation means changes won’t be instant, the falling oil price removes one of the biggest upward pressures on the cost of petrol.
Specifically Brent benchmark oil prices fell more than $3 on Wednesday to their lowest level since before the start of the Iran war as supply concerns eased with more stranded oil tankers exiting the Strait of Hormuz.
U.S. crude futures, meanwhile, slipped below $70 a barrel, the lowest level since March 2.
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Brent crude futures the global benchmark, were down $3.42, or 0.4%, at $73.65 a barrel as of 1445 GMT, and U.S. West Texas Intermediate slipped $3.32, or 4.6%, to $69.87 a barrel.
Brent touched a low of $73.22, its weakest level since February 27, the day before U.S.-Israeli strikes on Iran.
Three stranded tankers carrying 5 million barrels of crude oil were exiting the Strait of Hormuz on Wednesday, with two heading to Asia, shipping data showed, as the interim deal between Iran and the U.S. unlocks more supply stuck in the Gulf.
Physical crude oil cargoes were selling at discounts across the globe, changing trade flows as markets come under pressure from fast-rising Middle Eastern supply with Iran set to boost sales following a temporary reprieve from U.S. sanctions.
“While there are early encouraging signs of increased tanker activity, the market is pricing in the broader scenario of Iranian oil re-entering the global market and the Strait of Hormuz normalising,” said Tim Waterer, chief market analyst at KCM Trade.
“If sanctions are eased, Iranian production and exports could ramp up relatively quickly given the substantial amount stored on tankers — we are likely talking weeks rather than months,” Waterer added.
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Oman said it would keep the Strait of Hormuz open to shipping without imposing tolls and had designated two temporary routes north and south of the existing shipping lane to facilitate the safe passage of vessels leaving the region.
Prices have also come under pressure this week from the 60-day sanctions waiver Washington granted Tehran after initial peace talks, allowing Iran to sell oil, and from an easing of hostilities in Lebanon.
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Uncertainty remains over the durability of the U.S.-Iran accord, however. U.S. President Donald Trump said on Tuesday that Iran had agreed to nuclear inspections into “infinity”, although Tehran said it had made no such concession.
“Markets are currently assigning too much confidence to a favourable outcome without fully discounting the risks associated with unresolved nuclear issues and inspection disputes,” said Mark Malek, CIO at Siebert Financial.
However, U.S. inventories remained tight on strong refining demand and amid a release of oil from the government’s emergency stash.
U.S. crude stocks, including commercial and those in the Strategic Petroleum Reserve, fell by 15.1 million barrels to 743.3 million barrels in the week ended June 19, the EIA said, the lowest level since 1984.
Fuel inventories rose meanwhile. U.S. gasoline stocks rose by 2.1 million barrels compared with analysts’ expectations in a Reuters poll for a 0.6 million-barrel draw. Distillate stockpiles, which include diesel and heating oil, rose by 3.1 million barrels, versus expectations for a 0.5 million-barrel drop, the EIA data showed.
J.P. Morgan on Wednesday lowered its second-half 2026 Brent crude oil price forecast due to lower-than-expected OECD commercial inventory draws and softer demand for oil.
The bank sees Brent averaging $86 per barrel in the third quarter and $80 in the last quarter.
Elsewhere, Moscow’s oil refinery will be offline for at least six months after suffering extensive damage in Ukrainian drone attacks, two industry sources said on Wednesday.