Bonny Light crude falls 14.2% to $94.41 as global oil prices drop due to eased tensions, sanctions updates, and rising US oil inventories

Nigeria’s Bonny Light crude has recorded a significant decline, falling by 14.2% to $94.41 per barrel from about $110 earlier in the week, as global oil markets reacted to easing geopolitical tensions and changes in supply dynamics.

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The price movement follows developments linked to a ceasefire announcement attributed to former United States President Donald Trump, which contributed to improved market sentiment and reduced fears of disruptions in global oil supply chains.

Additional pressure on prices came after Iran reassured the international community of safe passage for oil tankers through the Strait of Hormuz, a critical route for global crude transportation. T

he assurance helped calm earlier concerns about potential supply interruptions that had driven prices upward in recent weeks.

In the international market, benchmark crude Brent crude also declined, falling to around $94 per barrel from approximately $100 per barrel, reflecting the broader downturn across oil benchmarks.

Market data also showed that crude inventories in the United States increased by 3.1 million barrels, according to the U.S. Energy Information Administration.

Commercial stockpiles rose to 464.7 million barrels, slightly above the five-year average for this period, further contributing to the bearish sentiment.

In addition, reports indicated that the United States has eased sanctions on Iranian and Russian oil exports, a move interpreted by analysts as part of efforts to stabilize global oil prices after recent volatility.

Industry stakeholders say the decline could have mixed implications.

While lower crude prices may reduce refining and transportation costs globally—potentially easing fuel prices for consumers—it may also impact export revenues for oil-producing countries like Nigeria.

An energy expert, Olatide Jeremiah, noted that sustained price declines could bring relief to motorists and transport operators through reduced fuel costs.

However, he cautioned that government revenue from crude exports may also decrease if prices remain subdued.

Nigeria’s fiscal framework for 2026 is based on an oil production benchmark of 1.84 million barrels per day, a reference price of $64.85 per barrel, and an exchange rate of ₦1,400 to the US dollar, suggesting that current market prices remain above budget assumptions despite the recent decline.

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The evolving market conditions highlight the sensitivity of global oil prices to geopolitical developments, production levels, inventory data, and policy decisions by major oil-consuming and oil-producing nations.