Nigerian crude oil prices and major oil contracts declined after US President Donald Trump expressed strong feelings about ending the Middle East conflict, following Israel and Iran’s agreement to cease fighting.
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The latest price showed Nigeria’s Bonny Light trading at $102 per barrel.
Iran and Israel said on Monday they had suspended attacks on one another at the request of US President Donald Trump, thereby reducing geopolitical fears and pressuring Crude Oil prices.
However, Iran warned that attacks will restart if Israel keeps bombing Hezbollah in Lebanon.
Geopolitical risks associated with the US-Iran stand-off over Iran’s nuclear program and the Strait of Hormuz keep the risk premiums afloat, helping to limit the decline in black liquid.
Demand for Nigeria’s light sweet crudes, such as Bonny Light and Qua Iboe, has surged in Europe and the Americas. These grades are favored by refiners globally for their low sulfur content and higher yields of gas and diesel.
Refiners in Europe and the Americas rushed to bid for Atlantic Basin crudes during spring blockages in the Middle East, including Nigerian supplies, to replace missing oil, leading to an unprecedented rise in Nigerian exports.
Brent crude fell below $93 a barrel after closing slightly higher Monday, while West Texas Intermediate (WTI) trades near $90. Israeli Prime Minister Benjamin Netanyahu stated that Israel is currently holding fire against Iran but will retaliate if attacked again. Iran has echoed this stance through its media.
Trump told reporters outside a New York court that “We are in the final stages of what will be a very, very good deal. We should have something that’s finalized within a day or two at least.”
Earlier, he claimed that the US would soon announce a “total victory” in the war within the next two weeks.
The rising tensions threaten broader peace negotiations amid the Middle East conflict. President Trump has called for easing tensions. A fragile cease-fire is in place, yet a dual blockade by Tehran and Washington continues to effectively close the Strait of Hormuz, restricting global oil and gas supplies.
The US military disabled an unmanned oil tanker attempting to breach the blockade en route to an Iranian port in the Gulf of Oman, as reported by US Central Command on X. Additionally, the Israeli military shot down an unusual aerial target originating from Yemen.
Chinese imports have drastically fallen amid the turmoil, with crude deliveries last month hitting an eight-year low. Beijing has relied on stockpiles and reduced refinery operations rather than seeking replacement barrels due to supply disruptions caused by the conflict.
Even if a US-Iran deal is reached, many obstacles remain to restart oil trade smoothly. These include clearing mines from the Strait of Hormuz, restabilizing offline fields—which could take months—and repairing damaged energy infrastructure from drone and missile attacks.
Markets believe prices need to stay firmly in triple digits to reflect the depleted stock levels accurately.
Earlier this year, the market reacted by skyrocketing global oil prices as a consequence of the Logistical Shock in the Persian Gulf, and Brent was easily priced between $100-$110 as it started pricing in higher costs associated with closed shipping routes and suspended war risk insurance.
US President Donald Trump suggested significant momentum in favor of a permanent Israeli-Iranian truce; the market is already starting to factor in the reopening of the Strait of Hormuz, and analysts (such as the Fitch Ratings projection that has been released recently), it will eventually translate to global crude prices sliding back down to supply/demand driven levels.
