Fuel prices may drop in the coming days if oil prices continue to plunge following ongoing peace talks between the United States and Iran. This came as oil prices fell from $111 last week to $97 on Monday morning.

The PUNCH had earlier predicted that a major drop in oil prices might be imminent if the United States and Iran reached an agreement that would reopen the Strait of Hormuz. As of Sunday, Brent crude hovered between $103 and $105 amid positive signals that the warring nations were ready to end the months-long conflict.

As predicted, prices dropped sharply to $97.48 in the early hours of Monday, fuelling speculation over a possible reduction in fuel prices if the Strait of Hormuz is eventually reopened.

Recall that crude oil, the major input for fuel production, rose from below $70 since the US-Iran war began on February 28. In about three months of the conflict, crude traded above $100 and climbed beyond $115 at some points, leading to a sharp rise in fuel prices globally.

In Nigeria, petrol prices increased from N830 per litre to the current N1,300. Diesel and aviation fuel prices also rose sharply, with airline operators threatening to suspend operations.

As crude prices continued their downward trend in recent days, speculation intensified that the Dangote Petroleum Refinery may consider reducing petrol prices.

There were reports that the US and Iran had agreed in principle to a deal aimed at winding down the conflict in the Middle East by reopening the Strait of Hormuz.

US President Donald Trump had on Saturday said the Strait of Hormuz would be reopened as part of a proposed agreement involving the United States, Iran, and several Middle Eastern countries amid efforts to end the ongoing Iran conflict.

Trump disclosed this in a post on the Truth Social platform after a series of calls with leaders of Saudi Arabia, the United Arab Emirates, Qatar, Pakistan, Türkiye, Egypt, Jordan, Bahrain, and Israel.

According to him, an agreement had been negotiated, subject to finalisation between the United States, Iran, and several other countries. The American leader added that final aspects and details of the deal were still being discussed and would be announced shortly.

Speaking on the strategic waterway at the centre of the conflict, Trump declared that the Strait of Hormuz, through which 20 per cent of global oil passes, would be reopened.

On Sunday, Trump said talks with Iran were “proceeding in an orderly and constructive manner”, adding that he had instructed his representatives not to “rush” into a deal because time was on their side.

Meanwhile, Iran confirmed on Monday that talks with the US were progressing, though it said signing an agreement was not imminent. According to the BBC, Iran confirmed that some progress had been made in talks with the US, but a deal “is not imminent”.

Foreign ministry spokesman Esmail Baqai made the remarks after US Secretary of State Marco Rubio said an agreement could possibly be reached on Monday.

“It is correct to say that we have reached a conclusion on a large portion of the issues under discussion. But to say that this means the signing of an agreement is imminent, no one can make such a claim,” Baqai said in Tehran on Monday.

The memorandum of understanding between the US and Iran reportedly involves a 60-day ceasefire extension, reopening the Strait of Hormuz, and a framework for further negotiations over Iran’s nuclear programme.