Hope for cheap petrol prices ignited on Mondy as Nigerian crude oil and major oil contracts slid following fresh talks between the US and Iran expected to begin under President Donald Trump.
The high expectations are based on thr fact that the deal would reopen the Strait of Hormuz. Petrol sells between N1260 to N1280 in some parts of Lafos and Ogun fuel stations
Brent crude futures tumbled 7 percent to $82 a barrel after Trump stated he consented to scrap a massive attack on Iran and consult his aides before a Middle East conflict, as its allies, including Saudi Arabia, begged him to hold talks for peace in the region instead. Nigerian crude oil last traded above $85 a barrel
The implication is that, for now, the basic market fundamental in the crude oil market is based on relarive place between the warring US and Iran with the understanding that the supply panic subsides when diplomatic progress is made, leading buyers to pull away from elevated spot premiums.
Supply fears still impact Middle Eastern shipping routes such as the Strait of Hormuz; refiners from Asia to Europe would frantically snap up non-Gulf light sweet crude. That temporarily raises demand levels, forcing Nigerian grades to remain above the $80 mark.
Crude Oil remains Nigeria’s major source of government income and dollar receipts despite recent efforts by the FG to diversify the economy. Every $1 reduction in crude oil price represents billions of dollars lost to Nigerian budget shortfall and reduced dollar income for the federation.
This dwindling inflow of foreign currency affects the central bank’s level of FX reserves, which in turn adds pressure to the Nigerian foreign exchange market
On the contrary, it is good news for Nigerians as the fall in crude feedstock prices leads to a reduction in the landside costs for crude, meaning cheaper refining costs for the Dangote Refinery, Cheaper landing costs for Nigerian fuel importers translating to cheaper fuel prices at the pumps, making transportation costs less prohibitive and bringing down the overall headline consumer inflation number.
Iran Says No Talks Are Under Way With United States After Trump Calls Off Attacks
However, Iran said on Monday there were no talks under way with the United States and no plans for any meetings, contradicting U.S. President Donald Trump who had cited talks he said would take place that afternoon as justification for calling off attacks.
Over the weekend Trump repeated a pattern that has emerged throughout the past five months: announcing plans for “massive attacks” on Iran, only to cancel them at the last minute.
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“Would I rather make a deal? I’m not looking to kill people,” Trump said aboard Air Force One on Sunday.
“Now what we’re doing is talking to them, in the form of a negotiation. It begins tomorrow afternoon,” he said, without identifying a venue or participants for such talks.
Iran’s Foreign Ministry spokesman Esmail Baghaei rejected the claim, saying no negotiations with the United States were taking place and no meetings were scheduled. Iran had no plans to host foreign delegations or send negotiators abroad in the coming days, he said.
Baghaei added that all Iranian negotiators were currently in the country, apart from Foreign Minister Abbas Araqchi, who was on a religious pilgrimage in Iraq. The only talks under way, he said, were discussions with Oman over management of the Strait of Hormuz.
A senior Iranian source also told Reuters that no talks were planned and that Araqchi would be unavailable at least until the end of the week.
REPEATED PATTERN
Monday’s developments appeared to fit a pattern that has emerged since Trump launched “Operation Epic Fury” alongside Israel more than five months ago. On several occasions, Trump has threatened military action only to later cite diplomatic contacts as a reason for stepping back.
Iran, however, has publicly rejected negotiations with Washington since a June memorandum of understanding aimed at ending the conflict collapsed in early July.
Trump has yet to achieve the objectives he set out at the outset of the war: dismantling Iran’s nuclear programme, curbing its ability to attack regional rivals and creating conditions for Iranians to overthrow their clerical rulers.
Repeated U.S. escalations have been met by escalating Iranian responses against U.S. forces in the region, Washington’s Gulf Arab allies and shipping, each time ending with Trump stepping back.
The dispute over the Strait of Hormuz remains a central point of contention. Washington says the June memorandum required Iran to open the strategically vital waterway, while Tehran argues the text explicitly preserved its authority over shipping traffic.
That would leave Tehran with greater leverage over the strait than before the war, a result that would likely be seen as a significant setback for Trump.
So far the United States has failed to compel Iran to relinquish its grip on the waterway, sending global oil prices higher and pushing up politically sensitive gasoline prices in the United States.
Oil prices fell on Monday after Trump’s latest decision to hold back from military action, with Brent crude futures down more than 4% to around $84 a barrel.
In the latest reported incident in the strait, the British maritime security body UKMTO said overnight that the master of a vessel had reported an explosion in the water near the ship. No one was hurt.
Writing by Peter Graff Editing by Ros Russell
