Global oil prices tumbled sharply in early Asian trading on Wednesday following an announcement by President Trump of a conditional two-week ceasefire arrangement with Iran.
As of Wednesday morning, West Texas Intermediate crude had declined by 14.44 per cent to $96.64 per barrel, while Brent crude slipped to $95, marking a 12.97 per cent drop from the previous day.
The steep decline was triggered by Trump’s pledge to suspend military actions against Iran for two weeks, on the condition that Tehran immediately guarantees safe navigation through the Strait of Hormuz.
“This will be a double-sided CEASEFIRE!” Trump said on social media, marking a sharp reversal from his earlier warning that “a whole civilization will die tonight” if Iran failed to comply with U.S. demands.
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Prior to this, Iran’s Foreign Minister, Abbas Araqchi, had indicated that Tehran was willing to halt attacks, provided that strikes against the country stopped and maritime movement through the Strait would be managed in coordination with Iranian authorities.
Oil prices had earlier surged beyond $105 per barrel after Trump issued a final warning to Iran over reopening the Strait of Hormuz.
That spike prompted the Dangote Refinery to raise its gantry petrol price to N1,275 per litre on Tuesday.
With crude prices now falling, expectations are rising that the 650,000-barrel-per-day refinery may lower its petrol price, offering some relief to Nigerians currently purchasing fuel at between N1,290 and N1,350 per litre in Abuja.