International crude oil prices fell by more than 2% in early trading on Monday, as traders reassessed supply risks following last week’s rally.
As at the time of writing 4:55 am West Africa Time (WAT), Brent crude was down 2.18% at $114.20 per barrel, while WTI declined 2.35% to $100.80 per barrel.
The pullback followed a strong rally last week, when Brent gained approximately 6% amid concerns over attacks on Saudi Arabian infrastructure and potential disruptions to Middle East oil supplies.
The decline appears to reflect a correction after recent gains, as investors reassess whether geopolitical tensions will translate into sustained supply losses. Some traders may also be taking profits following the rally, although the latest price movement alone does not establish a longer-term downward trend.
Supply expectations are another factor influencing market sentiment. Market analysis cited by The Wall Street Journal indicated that oil flows from the Middle East had reportedly returned to around pre-war levels, potentially easing immediate concerns about shortages. However, the durability of these flows remains important as shipping and security risks persist.
Geopolitical uncertainty continues to underpin the market. Houthi attacks on Saudi Arabia over the weekend, including reported strikes targeting an airport and oil facilities, have kept concerns over regional energy infrastructure in focus. Any escalation that disrupts production or exports could reverse the recent decline in prices.
For Nigeria’s downstream petroleum market, lower crude prices could eventually ease some pressure on refined product replacement costs if the decline persists. However, domestic petrol and diesel prices also depend on refinery pricing, import costs, the naira-dollar exchange rate, inventories and distribution expenses. A single-session decline is therefore insufficient to confirm that depot prices will fall.
Market participants will continue to monitor developments in the Middle East, the security of oil shipments, global inventory trends and benchmark crude prices to determine whether the latest decline represents a temporary correction or the start of a more sustained retreat.