Oil prices extended their losses on Tuesday as optimism over a US-Iran agreement and the anticipated reopening of the Strait of Hormuz eased fears of supply disruptions in the global energy market.
As of 06:45 a.m. (WAT), Brent crude fell 0.59% to $82.68 per barrel, while WTI crude dropped 0.42% to $80.41 per barrel.
The decline comes after the US and Iran announced a breakthrough deal expected to reopen the strategic waterway later this week, prompting traders to remove the geopolitical risk premium that had driven prices higher in recent weeks.
Market sentiment was further boosted after the first LNG tanker, Disha, successfully passed through the Strait of Hormuz on Monday en route to India, signalling a gradual return of energy shipments from the Gulf.
The development has strengthened expectations that oil and gas supplies will normalise, easing concerns over prolonged disruptions to global trade.
However, shipping companies remain cautious. A spokesperson for Japan's Mitsui O.S.K. Lines told Reuters: "While we are aware of signs of progress towards a ceasefire, our policy remains unchanged; we will only resume navigation once safety has been fully confirmed."
Analysts say oil prices could remain under pressure in the coming days if the agreement is formally signed and shipping activities through the Strait of Hormuz resume fully.
For Nigeria, lower international crude prices could create room for further reductions in petrol and diesel prices and increase competition with Dangote Refinery, especially as marketers adjust to changing global market conditions.