Oil prices fell nearly 2% in early trading on Monday after US President Donald Trump waived key sanctions and proposed tariffs on Russian oil, raising expectations of improved global supply following last week’s rally driven by escalating geopolitical tensions and disruptions to oil flows through the Strait of Hormuz.
As at 5:57 am (WAT), Brent crude futures declined by 1.85% to $107.83 per barrel, while West Texas Intermediate (WTI) futures fell by 1.62%, trading at approximately $99.77 per barrel.
The latest decline followed Trump’s executive order waiving numerous Russia-related sanctions and proposed tariffs on countries importing Russian oil. The decision came shortly before new sanctions were due to take effect and was described by the US president as being in the national interest. Markets interpreted the move as a potential pathway to higher Russian fuel exports and improved supply availability.
The prospect of additional Russian supplies could ease pressure on international petroleum markets, particularly refined products such as diesel, where supply constraints have contributed to higher prices. However, the scale of any increase will depend on how the waiver is implemented, the response of trading partners and Russia’s capacity to sustain exports.
The market remains exposed to significant geopolitical risks despite the latest price decline. Disruptions around the Strait of Hormuz, which handles a substantial share of global oil shipments, have tightened supply expectations, while renewed attacks on commercial vessels and continued regional hostilities have sustained concerns about further interruptions.
Iran has also maintained that its proposal to reopen the Strait of Hormuz within seven days remains on the table, according to remarks by Foreign Minister Abbas Araqchi reported by Iranian media. The status of the proposal and the wider security situation remain important factors for traders assessing the risk of further supply disruptions.
Last week’s rally was driven by fears of tighter supply following escalating Middle East tensions and attacks on Russian energy infrastructure, including damage to the Ryazan oil refinery in Ukraine-related strikes. These developments raised concerns that available crude and refined product supplies could become more constrained even as governments considered measures to ease market pressure.
For Nigeria’s downstream petroleum market, the direction of international crude prices remains important because changes in global product prices, freight, insurance and foreign exchange costs influence the landing cost of imported fuels. A sustained decline in crude and refined product prices could ease replacement costs for importers and marketers, although any impact on depot and retail prices would depend on local supply conditions, inventories and pricing decisions.
The latest pullback therefore offers some relief to buyers after Friday’s sharp rally, but it does not yet signal a lasting easing of the global supply outlook. Traders will continue to monitor the implementation of the Russian sanctions waiver alongside developments around the Strait of Hormuz and the wider Middle East conflict.