Global crude oil prices fell sharply on Wednesday following the announcement of a ceasefire agreement between the United States, Israel and Iran, easing concerns over supply disruptions.
Brent crude dropped by about $15 or 13.54 per cent, to $94.47 per barrel as of 6:16 p.m. Nigerian time, falling below the $100 benchmark after days of sustained increases.
The decline followed an announcement by US President Donald Trump that the parties had agreed to a two-week ceasefire.
The agreement came shortly before a deadline issued by the US to Iran over the reopening of the Strait of Hormuz, a critical global shipping route through which about 20 per cent of the world’s oil supply passes.
Tensions had escalated in recent weeks, with threats of military action and disruptions to oil shipments raising fears across global markets.
Oil prices had maintained an upward trend since hostilities involving the US and Israel against Iran began on 28 February, with the conflict affecting supply chains and pushing up energy costs worldwide.
The situation worsened after Iran restricted movement through the Strait of Hormuz, triggering supply concerns and driving a surge in global petrol prices.
In Nigeria and other countries, petrol prices rose sharply during the period. In Nigeria, pump prices climbed from about N870 per litre before the crisis to nearly N1,500 per litre at its peak before easing slightly.
The spike in oil prices prompted governments worldwide to adopt various measures to cushion the economic impact on citizens.
The ceasefire deal, the U.S. and Israel would halt attacks on Iran, while Iran would guarantee safe passage for vessels through the Strait of Hormuz and suspend retaliatory actions.
The ceasefire, reportedly mediated by Pakistan, was confirmed by President Trump and Iran’s Foreign Minister, Abbas Araghchi.
