Global Oil prices continued their downward trend on Monday following the signing of a ceasefire agreement between the United States and Iran to end hostilities in the Middle East and reopen the Strait of Hormuz.
Brent crude, the global benchmark, dropped from $87 per barrel on Sunday to about $83 per barrel on Monday, according to Oilprice.com. The decline came as markets reacted to news of the agreement announced over the weekend.
Following the announcement of the deal, oil prices extended their downward trend amid expectations of improved global supply stability.
According to Punch story, if the US-Iran peace deal is successfully signed, petrol prices could plummet as low as N900 per litre in the next few days.
Oil prices fell further after U.S. President Donald Trump announced the signing of a peace agreement and a partial reopening of the Strait of Hormuz. The development triggered expectations that fuel prices could decline in the coming days if the crisis is fully de-escalated, with analysts projecting a possible drop in gasoline costs.
Recall that crude oil, which traded at over $120 per barrel in April, had already fallen to about $87 per barrel as of Sunday and further declined to $83 on Monday.
Since the US–Iran crisis began on February 28, crude oil prices—the main feedstock for fuel production—rose sharply from below $70 per barrel. Over the course of the more than three-month conflict, global fuel costs increased significantly as oil traded above $100 per barrel and, at times, neared $120 per barrel.
With the latest developments, however, that upward trend is now expected to reverse as market conditions stabilise and supply pressures ease.
BACKSTORY…
According to Reuters, a U.S. official said that Donald Trump, Vice President JD Vance, and Iranian Parliament Speaker Mohammad Bagher Qalibaf signed a memorandum of understanding.
Trump stated that, following a formal signing on Friday, the language of the agreement would be made public. According to the United States, the deal includes provisions for the immediate reopening of the Strait of Hormuz and the lifting of the US blockade on Iran.
It was also gathered that the agreement would extend a ceasefire for 60 days of negotiations, during which contentious issues such as the future of Iran’s nuclear programme are expected to be addressed.
