Oil prices dropped sharply on Friday afternoon, with Brent crude falling more than 10 percent to around $86 a barrel by 3:46pm Nigerian time. The decline followed an announcement by Iranian Foreign Minister Abbas Araghchi that the Strait of Hormuz was "completely open" to commercial shipping, easing concerns over supply disruptions. The Strait, through which about a fifth of the world's oil passes, had been subject to restrictions earlier in the conflict, contributing to market volatility. Brent, the benchmark for Nigeria's crude oil, had recently approached triple digits amid heightened tensions.
Arghani's statement was shared via X during a temporary Middle East ceasefire and referenced the opening of the waterway in line with the truce in Lebanon. Global markets reacted swiftly, with the S&P 500 and Nasdaq each rising over 1%, while the Dow Jones Industrial Average gained more than 1.7%. Analyst Arne Lohmann Rasmussen of Global Risk Management noted that markets were pricing in an end to both the war and the closure of the Strait, though he cautioned the opening might only apply to vessels along the Iranian coastline. U.S. President Donald Trump welcomed the development but confirmed the naval blockade of Iranian ports would continue until negotiations concluded.
Iran's sudden declaration on the Strait of Hormuz directly triggered a double-digit crash in Brent crude, Nigeria's oil benchmark. A price drop to $86 a barrel means less revenue for Nigeria's oil-dependent budget if sustained. The market's reaction shows how global geopolitical shifts can instantly reshape Nigeria's economic outlook. Any stability in oil prices now hinges on fragile ceasefire terms beyond Nigeria's control.
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