PETROL prices are expected to fall globally following Iran decision to reopen the Strait of Hormuz for two weeks as part of temporary ceasefire agreement with the United States.
The ICIR reports that Nigeria’s crude – Bonny Light – fell below $95 a barrel on Wednesday from over $130 hours before the announcement.
Petrol, currently selling at an average of N1,370 per litre in several parts of the country, is expected to experience a marginal drop should the ceasefire stand.
The conflict has adversely affected Nigeria’s petroleum pricing, but analysts expect a marginal drop in price from Dangote Refinery, which currently supplies a larger percentage of local consumption.
It would be noted that the price of oil had increased by more than half since the conflict between the US and Iran began over five weeks ago.
The iCIR reported that the US President Donald Trump suspended his planned bombing of Iran’s energy infrastructures on Tuesday, April 7, following the Islamic Republic’s promise to reopen the Strait of Hormuz, a waterway through which a fifth of global oil and gas passes.
Oilprice.com news showed declining crude prices, with West Texas Intermediate losing almost 20 per cent and Brent as much as 16 per cent as investors heaved a huge sigh of relief after more than five weeks of war that has weakened supplies.
Petroleumprice.ng also confirmed that following the ceasefire deal, market reaction was swift and dramatic, with US crude futures down around 15 per cent to $96.31 a barrel, while Brent futures also slid 13 per cent to $94.71 per barrel.
The euphoria also sent global equities rocketing on hopes that the crisis that has shocked the global economy for more than a month would come to an end.
In Asia, Japan’s Nikkei jumped about five per cent while South Korea’s KOSPI vaulted six per cent, triggering a brief halt in trading. That left the MSCI’s broadest index of Asia-Pacific shares outside Japan up four per cent.
Seoul jumped 6.9 per cent and Tokyo 5.4 per cent, while Taipei added more than four per cent and Mumbai 3.8 per cent.
Hong Kong advanced nearly three per cent, while Sydney, Shanghai, Bangkok, Manila, Jakarta, Singapore, and Wellington were also sharply higher.
Trump had threatened on Tuesday that if Hormuz was not reopened, “a whole civilisation will die tonight, never to be brought back again”. That came after he vowed to bomb bridges, power plants, and other civilian infrastructure in Iran.
Iran warned it would deprive the US and its allies of oil and gas “for years” if he did so.
However, as the world counted down to the cutoff, the US president took to social media to say: “Subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks.”
He added that it “will be a double-sided CEASEFIRE!” and that “we have already met and exceeded all Military objectives, and are very far along with a definitive Agreement concerning Longterm PEACE with Iran, and PEACE in the Middle East”.
He later said on Truth Social that the United States would help with the traffic buildup in the Strait of Hormuz, adding, “There will be lots of positive action! Big money will be made. Iran can start the reconstruction process.”
Prime Minister Shehbaz Sharif of Pakistan, who has played a key mediator role, said the ceasefire would start immediately.
He said the United States “along with their allies” had agreed to a ceasefire everywhere, including Lebanon, implying that Israel had agreed to halt its invasion of its northern neighbour.
However, Tel Aviv said it supported the suspension of the bombing of Iran, but maintained the ceasefire did not include Lebanon.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.