Lagos, Nigeria – Nigerian crude oil and major oil contracts crashed below $95 per barrel on Wednesday after Iran agreed to reopen the Strait of Hormuz for two weeks in exchange for a temporary ceasefire with the United States.
Bonny Light, a major Nigerian crude, saw significant declines alongside Brent crude and West Texas Intermediate, which were both down by more than 15 percent at publication.
Okay News reports that President Donald Trump announced on social media that he had agreed to suspend bombing and attacks on Iran for two weeks, provided Iran consents to the complete, immediate, and safe opening of the Strait of Hormuz. Iranian Foreign Minister Abbas Araghchi confirmed that safe passage through the strait will be possible via coordination with Iran’s Armed Forces for two weeks, and that defensive operations will cease if attacks against Iran are stopped.
The agreement buys time for both sides to negotiate a more comprehensive end to the six-week conflict, which has resulted in thousands of deaths and a global energy crisis. Iran has sent Washington a 10-point proposal for a full ceasefire, with talks scheduled to begin in Islamabad on April 10. A White House official confirmed that Israel has also consented to the ceasefire.
Pakistan Prime Minister Shehbaz Sharif requested that Trump extend the deadline on Iran by two weeks to allow diplomacy to run its course, also asking Tehran to reopen the strait as a gesture of goodwill. The developments raised hopes that tensions in the region could ease after recent gains fueled by fears of prolonged disruption to energy flows through the Strait of Hormuz, weighing on crude oil prices.
This crude oil prices drop reflects growing optimism about a diplomatic resolution to the Middle East conflict. Stabilising crude oil prices could provide relief to oil-importing nations and reduce inflationary pressures globally.
