Nigerian crude and other major oil contracts extended losses for the fourth consecutive trading session as growing optimism over a possible agreement between the United States and Iran eased concerns about global supply disruptions.
Crude prices declined by nearly six per cent, with Nigerian crude trading around $105 per barrel amid expectations that the Strait of Hormuz could soon reopen fully to international shipping traffic.
According to reports cited by Axios, officials from both countries are discussing a proposed agreement that would begin with a 60-day extension of the ceasefire between the United States and Iran. The arrangement would allow ships to move freely through the Strait of Hormuz while broader nuclear negotiations continue.
Under the proposal, Iran would remove mines reportedly placed in the waterway and reopen shipping access, while the United States would ease restrictions on Iranian ports. The Strait of Hormuz handles nearly one-fifth of global oil and liquefied natural gas supply.
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The possibility of improved access through the route has reduced fears of prolonged supply shortages that previously pushed oil prices sharply higher. Earlier disruptions in the Middle East had forced producers to cut millions of barrels of daily output, tightening global energy markets.
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However, uncertainty around the talks remains. United States President Donald Trump stated on social media that negotiators should “not rush into a deal,” while a senior administration official said no agreement would be signed immediately despite ongoing progress.
Israeli Prime Minister Benjamin Netanyahu also insisted that any final agreement with Iran must address nuclear security concerns. Reports from Iran’s Tasnim news agency indicated that discussions were still facing obstacles, including issues linked to frozen Iranian assets.
Despite the recent price decline, Nigeria continues to benefit from elevated crude prices in the international market. Oil revenues averaging above $110 per barrel have supported government finances and helped strengthen foreign exchange stability.
Nigeria’s upstream oil sector also recorded a modest recovery in the second quarter, with average production rising to about 1.49 million barrels per day from roughly 1.35 million barrels per day in the first quarter.
However, production remains below both Nigeria’s OPEC+ quota of 1.50 million barrels per day and the Federal Government’s 2026 budget target of 1.84 million barrels per day due to pipeline security and infrastructure challenges.
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