Further Drop In Domestic Fuel Prices Expected As Oil Slips Below $75

Crude oil prices fell sharply on Thursday, with the WTI crude slipping below $75 per barrel for the first time since early March 2026, market participants said, after the United States and Iran reached an agreement to end a prolonged conflict that had caused the largest supply disruption on record.

Traders and analysts told reporters that the announcement of an interim deal and the resumption of shipping through the Strait of Hormuz prompted a rapid reassessment of near-term supply risks.

A market analyst at IG Australia Pty Ltd., Tony Sycamore, noted in a note cited by Reuters that it is challenging to foresee crude oil prices declining significantly over the next 60 days, given uncertainties around negotiations and the nuclear issue.

Also, Nigerian domestic fuel prices are expected to fall further in the coming days as oil prices continue to ease.

On its part, Brent crude rose to $79.70 per barrel on June 18, 2026, up 0.19 per cent from the previous day on a contract-for-difference (CFD) measure that tracks the benchmark market, data showed.

But over the past month, Brent’s price had tumbled 28.38 per cent, even though it remained about 3.92 per cent above levels seen a year earlier, the traders said.

President Donald Trump said an interim agreement had been signed and that there were plans to quickly reopen the key Persian Gulf shipping route.

The administration described the pact as an initial step to halt hostilities and allow commercial activity to resume safely.

Early signs of progress were noticeable at sea. Shipping agents reported that several vessels began crossing the Strait of Hormuz again after weeks of disruption, and that Saudi oil tankers and ships carrying liquefied natural gas and fuel had left the Gulf.

Market analysts noted that a sustained reopening of the Hormuz could enable major oil producers to resume halted production.

A commodities strategist at the Commonwealth Bank of Australia, Vivek Dhar, said in a Reuters report that oil flows through the Strait of Hormuz only need to return to 60–70 per cent of pre-war levels to bring markets back to previous oversupply expectations.

That potential return of crude to global markets was a key factor in the price correction.

Prices had already fallen about 38 per cent from a four-month high reached in April, reflecting both improving supply prospects and demand concerns, traders said. Despite the recent drop, historical perspective shows Brent remains well below the all-time peak of $147.50 reached in July 2008, analysts pointed out.

However, industry sources cautioned that physical inventories and storage levels remain a constraint on how quickly markets will loosen. Crude stocks at Cushing, Oklahoma — the main US storage hub and price settlement point — had fallen to about 20 million barrels, traders said, leaving limited near-term buffer for US refiners. “Inventories are still tight in key locations, which could keep prices sensitive to any fresh disruptions,” an energy market analyst said.

Refiners and shipping firms also warned that the speed of the recovery would depend on security conditions and insurance markets. “Even if the strait is officially open, insurers and charterers will need confidence that transits are safe before restoring normal schedules,” a shipping insurer said. Elevated insurance premiums and logistical delays could persist, they added, prolonging some market unease.

Market participants said they would closely watch further diplomatic developments and production statements from Gulf producers for clues on how quickly output might return. “Timer, a market analyst at KCM, told Reuters that the geopolitical risk premium priced into crude is being unwound aggressively as traders anticipate the resumption of oil flows