Global oil prices recorded a sharp decline on Thursday as investors reacted positively to signs of easing tensions in the Middle East. The drop followed reports of a possible ceasefire agreement that could reduce the risk of disruptions to global oil supplies and eventually lead to the reopening of the strategic Strait of Hormuz.
Brent crude, the international oil benchmark, fell by $3.20, representing a 3.27 percent decline, to settle at $94.61 per barrel. Similarly, the United States West Texas Intermediate (WTI) crude dropped by $3.71, or 3.86 percent, to close at $92.31 per barrel.
The decline came after Israel and Lebanon announced plans to implement a ceasefire agreement. The development raised hopes among investors that broader diplomatic efforts could help reduce tensions across the region. Market participants are also closely monitoring discussions involving the United States and Iran, as any progress could improve stability in one of the world’s most important oil-producing regions.
Reports indicate that Iran has linked any future agreement partly to an end to clashes between Israel and Hezbollah, the Lebanese group backed by Tehran. The possibility of reduced conflict has encouraged traders to reassess fears of supply disruptions that had previously pushed oil prices higher.
Only a day earlier, oil prices had surged by nearly two percent due to renewed concerns over regional security. Those worries intensified after reports of Iranian attacks on Kuwait and military operations by the United States near the Strait of Hormuz. The waterway is one of the world’s most critical oil transit routes, carrying a significant share of global crude exports.
Meanwhile, political developments in the United States also attracted attention. The Republican-controlled House of Representatives approved a resolution aimed at preventing former President Donald Trump from continuing military action against Iran. However, the measure still faces major hurdles, including Senate approval and the possibility of a presidential veto.
In another development affecting global oil markets, Russia acknowledged a decline in its oil production. Russian Deputy Prime Minister Alexander Novak stated that output has fallen since the beginning of the year due to unexpected refinery maintenance activities. This marks the first official confirmation from Moscow regarding reduced production levels in 2026.
On the supply side, fresh data from the United States provided support for oil prices despite the overall market decline. The Energy Information Administration reported that U.S. crude oil inventories fell by 8 million barrels during the week ending May 29. Stockpiles dropped to 433.7 million barrels, significantly exceeding analysts’ expectations of a 4-million-barrel decrease.
Energy traders noted that the oil market remains highly volatile, with prices reacting quickly to geopolitical events, production changes, and inventory data.
Back in Nigeria, the energy sector continues to experience mixed outcomes. The Nigerian National Petroleum Company Limited (NNPC) recently reported more than a 70 percent increase in both revenue and profit. At the same time, the Dangote Refinery has benefited from strong fuel export activities.
However, despite these positive corporate performances, many Nigerians continue to face rising fuel costs. Higher pump prices are placing additional pressure on households and businesses, increasing concerns about inflation and the overall cost of living across the country.
