CRUDE oil price tumbled to $67.66 per barrel on Tuesday, June 24, after Israel and Iran reportedly agreed to a proposed ceasefire.
It hit its lowest in two weeks on Tuesday after it had risen to $77.79 per barrel on Monday, June 23, now reversing below Nigeria’s budgeted $75 per barrel benchmark.
The price of crude oil in the international market, which determines the up and down movement of the cost of refined petroleum products, has been inching higher recently following the geopolitical tensions in the Middle East.
On Tuesday, Brent crude futures were down 13 per cent at $67.66 a barrel at 06:45 GMT from $77.79 a barrel on Monday, June 23 at about 10:00 GMT.
Similarly, the United States West Texas Intermediate (WTI) crude fell to $64.76 per barrel on Tuesday from $74.60 Monday.
The US President Donald Trump has on his Truth Social channel announced a ceasefire between Israel and Iran in a war that started on June 13 and seems to have lasted for 12 days.
“The ceasefire is now in effect. Please do not violate it!” Trump had stated.
Global crude oil prices had jumped over seven per cent to $74.85 for the first time in over four months on Friday, June 13, after an Israeli attack on Iran.
It was the first time since January this year that crude oil prices have risen significantly to that amount.
But the proposed ceasefire is expected to alleviate worries of supply disruptions in the Middle East, a major oil-producing region.
Following a consistent drop in crude oil price below the budgetary benchmark, analysts have said it could portend a setback for the Nigerian government in implementing its 2025 budget.
This is because Nigeria relies largely on the proceeds from oil revenue to fund a large chunk of its national budget.
With $75 per barrel set as the oil price benchmark in the 2025 budget, dropping below this figure could cause possible upset, while increasing the chances of further borrowing by the government, The ICIR earlier reported.
The Federal Government is running on a budget size of N54.99 trillion, setting its crude oil price benchmark at $75 per barrel, oil production at 2.06 million barrels per day (bpd), which is far from meeting the target, and exchange rate at N1,500 per dollar.
However, after Trump announced the Israel-Iran ceasefire, oil prices immediately tumbled.
It happened just two days after the Nigerian National Petroleum Company Limited (NNPCL) and other oil marketers adjusted their pump prices of petrol to nearly N1,000 per litre.
This upward reversal sees the NNPCL increase its pump price of petrol to N915 per litre in Lagos and to N945 per litre in Abuja from N870 and N910, respectively.