Fuel prices in Nigeria could decline by as much as 20 percent if ongoing diplomatic efforts to end the Middle East conflict succeed in stabilising global crude oil markets, industry analysts have said.
The projection is based on two major developments currently influencing energy markets: diplomatic engagement by the Group of Seven (G7) nations and recent comments by U.S. President Donald Trump suggesting that the war involving Iran, Israel and the United States could soon wind down.
Energy analysts say a resolution of the conflict would likely ease fears of supply disruptions in the Middle East, particularly around the Strait of Hormuz, a key shipping route for global crude exports.
Global oil markets have already shown signs of reacting to these signals.
Earlier in the day, Brent crude surged to about $119.85 per barrel as escalating geopolitical tensions triggered fears of supply disruptions across the region.
However, market sentiment shifted sharply after Trump suggested that the military operation was progressing faster than expected and could conclude sooner than initially feared.
Following the remarks, Brent crude dropped to around $89.87 per barrel, representing an intraday decline of roughly 30 percent from the earlier peak, highlighting how sensitive oil markets remain to geopolitical developments.
Trump later addressed the spike in oil prices in a social media post, describing the surge as temporary and linked to security concerns surrounding Iran’s nuclear programme.
He argued that crude prices would fall quickly once the perceived threat is eliminated.
“Short-term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and world safety and peace,” Trump said.
At the same time, finance ministers from the G7 countries — Canada, France, Germany, Italy, Japan, the United Kingdom and the United States — have been holding consultations on developments in global oil markets.
The ministers recently discussed the possibility of releasing crude from their strategic petroleum reserves to stabilise prices, although a final decision was postponed pending further analysis by member states.
Analysts say the combination of diplomatic engagement by major economies and signals of possible de-escalation in the conflict could gradually cool crude markets.
If global oil prices continue to retreat, the impact is expected to filter into Nigeria’s downstream petroleum market, where pump and depot prices are closely tied to international crude benchmarks.
Based on current market averages, analysts estimate that a 20 percent decline in fuel prices could bring the price of Premium Motor Spirit (PMS) down from about ₦1,200 per litre to roughly ₦960 per litre.
Similarly, Automotive Gas Oil (diesel) could fall from around ₦1,620 per litre to approximately ₦1,296 per litre if the downward trend in crude prices is sustained.
Industry watchers say the next few days will be critical, as markets assess whether diplomatic efforts succeed in reducing tensions in the Middle East and restoring stability to global oil supply routes.