Nigerian crude oil, Bonny Light, fell below $95 a barrel on Wednesday after Iran agreed to reopen the Strait of Hormuz for two weeks as part of a temporary ceasefire with the United States. The waterway, through which 20% of the world's energy supply passes, had been closed amid escalating conflict, pushing Bonny Light above $130 a barrel. U.S. President Donald Trump had issued a deadline threatening "obliteration" if the strait remained closed, but announced a suspension of attacks after receiving what he called a "workable" 10-point proposal. Iran confirmed it would allow safe passage through the strait, triggering a sharp drop in global crude prices. West Texas Intermediate declined nearly 20%, while Brent futures slid 13% to $94.71 per barrel. U.S. crude futures dropped around 15% to $96.31. Global stock markets surged on relief, with Japan's Nikkei rising 5% and South Korea's KOSPI jumping 6.9%. Pakistan's Prime Minister Shehbaz Sharif stated the ceasefire would begin immediately and include Lebanon, though Israel clarified it did not consider Lebanon part of the truce.
The sudden drop in Bonny Light from over $130 to under $95 reveals how external geopolitical shifts, not domestic policy, drive Nigeria's oil revenue swings. With no control over events in the Strait of Hormuz, Nigeria remains at the mercy of distant conflicts despite its reliance on crude exports. This price plunge, triggered by a U.S.-Iran deal, means less income for the federal budget unless production or global prices stabilise. For Nigerians, it underscores the risk of depending on a single commodity shaped by powers far beyond Abuja's reach.
