Global oil markets experienced a sharp downturn on Wednesday after United States President Donald Trump announced a two-week ceasefire agreement with Iran, tied to the conditional reopening of the Strait of Hormuz. The development triggered immediate reactions across energy markets, with crude prices recording their steepest decline in years.
Brent crude, Nigeria’s benchmark, dropped significantly to $92.28 per barrel, representing a fall of 15.5 percent and a loss of nearly $17 in a single trading session. This marked the largest daily decline since April 2020, when global demand collapsed during the COVID-19 pandemic.
Although prices later recovered slightly, the initial shock underscored the sensitivity of global oil markets to geopolitical developments. Brent rebounded to $94.44 per barrel after losing $14.83, or 13.57 percent, while West Texas Intermediate (WTI) crude futures fell by $17.92, or 15.87 percent, to $95.03.
The sharp reversal came after weeks of elevated prices driven by tensions in the Middle East. At the peak of the crisis, oil prices had surged to as high as $120 per barrel amid fears of supply disruptions, particularly in the Strait of Hormuz, a vital artery for global energy trade.
The ceasefire announcement has eased some of those concerns, at least temporarily. The agreement, as outlined by Trump, is contingent on the safe reopening of the Strait, which has been effectively closed due to the conflict. The waterway is a critical route for the transportation of crude oil and liquefied natural gas, and any disruption has far-reaching implications for global markets.
In addition to crude oil, European natural gas prices also reacted strongly to the news, falling by approximately 20 percent at market opening in Amsterdam. The decline reflects growing optimism that energy supplies may stabilize if the ceasefire holds and shipping routes are restored.
However, uncertainty continues to cloud the liquefied natural gas market. For more than a month, no LNG cargo has successfully passed through the Strait of Hormuz. Reports indicate that two vessels carrying Qatari LNG were forced to abandon attempts to exit the route, disrupting exports and highlighting the risks associated with operating in the region.
Despite the ceasefire, physical supply constraints remain a significant concern. Shipping sources have disclosed that the Iranian navy had issued threats against vessels attempting to pass through the Strait without prior approval, effectively keeping the route closed. This has created a complex situation in which market sentiment may improve, but logistical challenges persist.
Iran has signaled a willingness to ease restrictions under certain conditions. Foreign Minister Abbas Araghchi indicated that Tehran would halt attacks if military strikes against Iran ceased. He also suggested that safe transit through the Strait could be permitted for a limited period of two weeks, provided it is coordinated with Iranian authorities.
A senior Iranian official further indicated that the Strait could reopen in a controlled manner ahead of planned negotiations between US and Iranian officials in Pakistan. These talks are expected to play a critical role in determining the future of the ceasefire and the stability of energy markets.
For shipping companies and refiners, the situation remains fluid. Many are seeking clarity on operational logistics, including crude loadings and transit arrangements, before making decisions about resuming activity in the region. The uncertainty surrounding these factors continues to influence market behavior.
Trump revealed that the United States had received a 10-point proposal from Iran, which he described as a workable framework for negotiations. He expressed optimism that both sides were making progress toward a long-term agreement that could bring lasting stability to the region.
Meanwhile, Nigeria’s oil sector has recorded notable gains amid these global developments. The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Bayo Ojulari, disclosed that crude oil production has increased significantly in recent years. Output rose from 960,000 barrels per day in 2022 to an average of 1.71 million barrels per day, reaching a peak of 1.84 million barrels per day in 2025.
Ojulari attributed this improvement to an integrated energy security framework that combines policy alignment, intelligence gathering, operational enforcement, regulatory oversight, industry collaboration, and community-based surveillance. These measures have played a key role in addressing challenges such as oil theft and pipeline vandalism, which have historically affected production levels.
The recovery in output has also contributed to renewed investor confidence in Nigeria’s oil and gas sector. Stakeholders view the progress as a positive sign, particularly at a time when global energy markets are experiencing volatility.
At a recent Parliamentary Roundtable in Abuja, Senate President Godswill Akpabio, represented by Senator Jimoh Ibrahim, emphasized the need for continued collaboration among stakeholders to sustain production gains and address remaining challenges.
Similarly, the Speaker of the House of Representatives, represented by House Leader Julius Ihonvbere, called for a comprehensive assessment of progress to ensure fairness and equity within the sector. The roundtable brought together key government officials, security agencies, and industry players, reflecting a coordinated approach to addressing industry concerns.
In the corporate sector, Exxon Mobil has indicated that higher oil and gas prices linked to the recent conflict could positively impact its upstream earnings. The company projected a potential increase of up to $2.9 billion in first-quarter earnings from its upstream operations.
However, Exxon also noted that its downstream segment may experience a temporary setback, with an estimated $5.3 billion impact due to timing effects. These losses are expected to be offset in subsequent quarters as shipments are delivered and market conditions stabilize.
The company further revealed that its overall oil and gas production is expected to decline by 6 percent in the first quarter compared to the previous quarter, when output stood at 5 million barrels of oil equivalent per day. Assets in Qatar and the United Arab Emirates accounted for approximately 20 percent of Exxon’s global production in 2025.
Exxon is scheduled to release its full first-quarter results on May 1, with investors closely monitoring the report for insights into broader trends within the energy sector.
The recent developments highlight the complex interplay between geopolitics and energy markets. While the ceasefire has provided temporary relief and triggered a sharp drop in oil prices, the underlying uncertainties remain significant.
For global markets, the key question is whether the ceasefire will hold and lead to a sustainable reopening of the Strait of Hormuz. For now, the situation remains fluid, with both risks and opportunities shaping the outlook.
As negotiations continue, the energy sector will be watching closely for signs of stability. The coming weeks are likely to be decisive in determining whether the current relief in oil prices can be sustained or whether renewed tensions will once again disrupt global supply chains.
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