Oil price drops to $90/barrel after Trump’s Straits of Hormuz threat

Crude oil prices dropped to $90 a barrel on Tuesday, markingthe first decline since the war in the Middle East began. Brent crude, the global oil benchmark, dipped by 8.45percent to $90 a barrel. The US West Texas Intermediate also fell by 8.58percent to $86.77 per barrel. On Monday, global crude price surged past the $100 perbarrel mark — the highest level since July 2022. The downward trend comes after ministers of Europeancountries discussed the release of oil reserves as part of measures to tame theprice upswings seen recently in the global market. The cool-off also follows remarks by US President DonaldTrump suggesting that the war in the Middle East may end soon, which helpedreduce fears of extended disruptions to global oil supply. Trump also warned that “death, fire, and fury will reignupon them (Iran)” if they stopped the flow of oil within the Strait of Hormuz. In response to Trump, on Tuesday, Iran’s IslamicRevolutionary Guards Corps (IRGC) said they would “determine the end of thewar,” and Tehran would not allow “one litre of oil” to be exported from theregion if US and Israeli attacks continued. The war involving the United States (US), Iran, and Israelhas raised global oil prices, leading to a hike in petrol prices in Nigeria. In the latest adjustment, the Dangote Petroleum Refineryincreased its ex-gantry price of petrol by N180 to N1,175 per litre. On March 9, David Bird, the chief executive officer (CEO) ofthe refinery, said the plant was not immune to global oil shocks as it securesits crude on international benchmarks.

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