Oil Price Slumps Below $80 on Hopes of De-escalation of US-Iran Conflict

Global oil prices continued their decline, with Nigeria's benchmark Brent crude slipping below the $80 per barrel mark. This drop is attributed to growing optimism that tensions between the United States and Iran may ease, potentially impacting oil flow from the Middle East.

Brent crude saw a marginal decrease, settling at $78.75 per barrel, while the US benchmark, West Texas Intermediate (WTI), dropped to $75.42 per barrel. This follows a significant 5% drop earlier in the week. Traders reacted to reports of diplomatic efforts aimed at ending hostilities between Washington and Tehran, despite Iran's denial of peace negotiations. US President Donald Trump indicated positive discussions were held, but warned of a strong response if a deal failed.

The potential reopening of the Strait of Hormuz, a critical chokepoint for global oil and natural gas supplies, is weighing on crude prices. Further pressure came from the United States, where official data revealed an unexpected increase in crude inventories. The Energy Information Administration reported a rise of 2.5 million barrels, contrary to analysts' expectations.

However, price drops were somewhat limited by renewed geopolitical risks. Yemen's Iran-backed Houthi movement announced a maritime embargo targeting Saudi ports and claimed responsibility for a missile attack on a Saudi oil tanker. Additionally, attacks on ships and terminals in the Black Sea have raised concerns over disruptions to global grain and oil trade.

In related news, the Dangote Petroleum Refinery has lowered its ex-depot price for petrol to N1,165 per litre from N1,215. Separately, Aliko Dangote, President and Chief Executive of Dangote Industries Limited, held discussions with Canadian Prime Minister Mark Carney regarding strengthening investment partnerships and deepening economic cooperation between Canada and Africa.