Oil prices fall to $90 per barrel after Trump warns over Strait of Hormuz

Global crude oil prices dropped sharply on Tuesday, with Brent crude falling by 8.45 per cent to $90 per barrel, while the United States’ West Texas Intermediate (WTI) declined by 8.58 per cent to $86.77 per barrel. The drop marks the first price decline since the outbreak of the Middle East conflict.

The fall comes a day after oil prices surged beyond $100 per barrel on Monday, reaching their highest level since July 2022 due to concerns about potential supply disruptions linked to tensions in the region.

Market analysts say the price correction was influenced by a mix of geopolitical developments and market responses. European ministers have reportedly considered releasing strategic oil reserves in a bid to stabilise global markets. Meanwhile, comments by former United States President Donald Trump also appeared to calm investor concerns.

Trump had earlier warned that “death, fire and fury” would be unleashed on Iran if it attempted to block oil shipments through the Strait of Hormuz, a key global oil transit route.

Reacting to the warning, Iran’s Islamic Revolutionary Guards Corps (IRGC) said it would “determine the end of the war,” adding that no oil would leave the region if attacks by the United States and Israel continued.

The ongoing Middle East tensions have already pushed global oil prices upward, with immediate consequences for fuel costs in Nigeria. Recently, the Dangote Petroleum Refinery increased its ex-gantry price of petrol by N180, raising it to N1,175 per litre.

Speaking on March 9, the refinery’s Chief Executive Officer, David Bird, explained that the facility remains vulnerable to fluctuations in global oil markets because crude oil prices are tied to international benchmarks.

The latest drop in oil prices was also supported by Trump’s suggestion that the conflict in the Middle East could soon be resolved, reducing fears of prolonged disruptions to global oil supply.