Trump-Iran Ceasefire Triggers Oil Price Rout as Brent Slumps to $92
Global oil markets recoiled sharply on Wednesday after U.S. President Donald Trump announced a two-week ceasefire agreement with Iran, tied to the immediate reopening of the Strait of Hormuz, a critical artery for global energy flows.
Brent crude, Nigeria’s benchmark, plunged 15.5 per cent to $92.28 per barrel—its steepest single-day decline since April 2020 at the onset of the COVID-19 pandemic—shedding nearly $17. The sell-off was triggered by easing fears over supply disruptions that had previously driven prices as high as $120 per barrel during the crisis.
Although prices later recovered slightly, Brent still closed significantly lower at $94.44, down $14.83, while U.S. West Texas Intermediate (WTI) crude fell $17.92, or 15.87 per cent, to $95.03 per barrel.
The ceasefire announcement also rippled through gas markets, with European benchmark natural gas prices dropping by 20 per cent at market open in Amsterdam. However, analysts cautioned that despite the immediate market relief—reflected in falling commodity prices and a rebound in equities—tightness in the liquefied natural gas (LNG) market is likely to persist.
Shipping disruptions remain a key concern. No LNG cargo has passed through the Strait of Hormuz in over a month, with even Qatari shipments forced to abort transit attempts amid security threats. Maritime sources indicated that Iranian naval forces had warned vessels against unauthorized passage, underscoring lingering uncertainties despite diplomatic overtures.
Iran’s Foreign Minister, Abbas Araqchi, said Tehran would suspend hostilities if attacks ceased and confirmed that limited, coordinated transit through the strait could resume within the two-week window. Talks between U.S. and Iranian officials are expected to follow, with Pakistan mentioned as a संभाव meeting venue.
Trump disclosed that Washington had received a 10-point proposal from Tehran, describing it as a workable framework for negotiations, while noting that a comprehensive peace deal remained some distance away.
Amid these global developments, Nigeria’s oil sector reported significant gains in production. The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Bayo Ojulari, revealed that crude output had surged by 77 per cent over three years, rising from 960,000 barrels per day in 2022 to an average of 1.71 million bpd, with peak production hitting 1.84 million bpd in 2025.
Ojulari attributed the recovery to an “integrated energy security model” in the Niger Delta that combines policy coordination, intelligence gathering, regulatory oversight, and community-based surveillance to combat oil theft and pipeline vandalism. He said the improved security architecture has restored investor confidence in Nigeria’s oil and gas industry.
At a parliamentary roundtable in Abuja, convened by the National Assembly’s petroleum committees, key government and security stakeholders emphasized the need for sustained collaboration to consolidate production gains. Senate President Godswill Akpabio, represented by Senator Jimoh Ibrahim, called for stronger inter-agency coordination, while House Leader Julius Ihonvbere urged continued evaluation to ensure equity and long-term stability.
Meanwhile, U.S. oil major ExxonMobil signalled that higher crude prices during the conflict could boost its first-quarter upstream earnings by as much as $2.9 billion. However, the company warned that downstream operations may suffer a hit of about $5.3 billion due to timing effects and supply disruptions.
The conflict, which began on February 28, had driven oil prices up by as much as 65 per cent, as production shut-ins and the closure of the Strait of Hormuz—responsible for roughly a fifth of global energy flows—tightened supply. Exxon noted that its overall production would decline by 6 per cent in the first quarter compared to the previous quarter, partly due to disruptions in key Middle East operations.
With Exxon set to release its full first-quarter results on May 1, investors are closely monitoring earnings indicators for broader signals about the trajectory of the global energy market in the months ahead.