Iran’s decision to shut the Strait of Hormuz again has weakened expectations that fuel prices would drop in Nigeria.
The Strait of Hormuz was reopened on Friday after a ceasefire agreement between Iran and the United States. However, less than 24 hours later, Iran closed the strait again, describing the move as a reaction to the continued blockade of its ports by the United States.
On Saturday, the Iranian military announced that control of the key waterway, which handles about 20 per cent of global oil trade, had “returned to its previous state”, with reports indicating that Iranian gunboats fired at a merchant vessel attempting to pass through.
Earlier, fuel marketers had predicted that petrol prices could fall from the current N1,250 to around N900 following the reopening of the strait on Friday.
The spokesperson of the Petroleum Products Retail Outlet Owners Association of Nigeria, Joseph Obele, said on Friday that crude oil prices had dropped after the strait was reopened.
Obele noted that petrol sold for about N800 before February 28, when the crisis began, expressing confidence that a significant reduction would have followed if the situation had remained stable.
“With the reopening of the Strait of Hormuz, Nigerians should expect a very significant reduction in petrol prices. Petrol will fall below N1,000 by next week, probably to N900 per litre. Don’t forget that the product was N800+ before the Middle East crisis. Now that the war is over, we should be expecting a return to that price regime,” he said on Friday.
However, on Sunday, Obele told our correspondent that the renewed closure of the Hormuz had crushed expectations of a price reduction. He added that the current situation would likely continue for now until Iran and the US reach a lasting ceasefire.
President Donald Trump said on Sunday that Iran had breached the ceasefire agreement with the US by attacking ships in the Strait of Hormuz, while repeating threats to strike Iranian energy infrastructure unless it agrees to end the conflict.
Our correspondent observed that there has not been any major spike in oil prices since Saturday when Iran shut the strait again. According to oilprice.com, Brent crude traded at $90 per barrel on Sunday, up from $88 before the closure. It was $95 as of Friday morning.
Meanwhile, US President Donald Trump again stated on Sunday that Iran violated the ceasefire agreement by attacking vessels in the Strait of Hormuz, warning once more of possible strikes on Iranian energy facilities if a deal to end the war is not reached.
“Iran decided to fire bullets yesterday in the Strait of Hormuz — a total violation of our ceasefire agreement!” he posted on Truth Social. “That wasn’t nice, was it?”
“We’re offering a very fair and reasonable deal, and I hope they take it because, if they don’t, the United States is going to knock out every single power plant and every single bridge in Iran,” he continued. “No more Mr Nice Guy!” he said.
Trump added that negotiators are expected to arrive on Monday evening in Islamabad, Pakistan, which hosted direct talks between both sides last weekend, with the current two-week ceasefire scheduled to end on Wednesday.
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