COUNTDOWN: 133 Days Since the USA-Iran War Began – Global Oil Market

Oil market stabilises after US-Iran conflict as crude prices retreat below $80
By Eyo Nsima

The global oil market has shown signs of stabilising following the recent military confrontation between the United States and Iran, with crude oil prices retreating below $80 per barrel as fears of prolonged supply disruptions eased.
Latest market data indicated that Brent crude, the international benchmark, traded at $76.01 per barrel, down 0.38 per cent, while the U.S. West Texas Intermediate (WTI) crude fell to $71.41 per barrel, representing a 0.93 per cent decline.
Similarly, the OPEC Basket slipped by 2.19 per cent to $76.25 per barrel, while Murban crude declined to $70.97 per barrel.
The moderation in prices comes weeks after the US-Iran conflict triggered sharp volatility in global energy markets, amid fears that hostilities could disrupt oil exports from the Middle East, particularly through the Strait of Hormuz, the world’s most strategic oil shipping route.
At the peak of the conflict, oil prices surged as traders priced in the risk of supply shortages and possible attacks on critical oil infrastructure across the Gulf region.
However, with military tensions easing and no major disruption to crude exports recorded, market confidence has gradually returned, leading to lower crude prices.

Supply fears ease

Energy analysts said the recent decline in prices reflects renewed confidence that global oil supplies remain adequate despite lingering geopolitical risks.
They noted that although the conflict heightened concerns over possible disruptions involving Iran and neighbouring oil-producing countries, production and exports from major producers remained largely uninterrupted.
The absence of prolonged disruptions has encouraged traders to unwind the geopolitical risk premium that had pushed prices higher during the conflict.
Apart from geopolitical developments, analysts said improving supply from OPEC producers and non-OPEC countries, combined with cautious global demand growth, has also contributed to the recent softening of prices.

Impact on fuel prices

The easing of crude oil prices could eventually translate into more stable prices for refined petroleum products, including gasoline and diesel, provided international market conditions remain favourable.
Current market indicators showed gasoline prices edging down by 1.78 per cent, while heating oil also recorded a marginal decline.
Natural gas prices equally weakened by 2.39 per cent, suggesting broader stability across global energy markets.
Industry experts said sustained moderation in crude prices would help reduce inflationary pressures in oil-importing economies, where high fuel costs have contributed to rising transportation and production expenses.

Implications for Nigeria

For Nigeria, lower crude oil prices present both opportunities and challenges.
As Africa’s largest crude oil producer, Nigeria earns the bulk of its foreign exchange and government revenue from crude exports. Lower international prices could reduce export earnings if the decline persists.
However, cheaper crude also has positive implications for the domestic downstream sector, particularly as local refineries, including the Dangote Refinery, continue to increase production of petrol, diesel, aviation fuel and other petroleum products.
Lower feedstock costs could improve refinery economics and help moderate domestic fuel prices, especially if global product prices continue to soften.

Outlook

Despite the current price retreat, analysts warned that the oil market remains highly sensitive to geopolitical developments in the Middle East.
Any renewed escalation involving the United States, Iran or other regional actors could quickly reverse the current trend by reintroducing supply concerns and driving prices higher.
Market participants are also expected to closely monitor OPEC+ production policies, global economic growth, refinery demand and inventory levels, all of which will influence crude prices in the coming months.
For now, however, the oil market appears to have moved beyond the immediate shock of the US-Iran conflict, with crude prices settling back to levels that suggest traders believe the risk of major supply disruptions has diminished, even as geopolitical uncertainties continue to linger.