Nigeria faces higher petrol prices as US and Iran fail to reach agreement at peace talks

NIGERIA is facing the prospect of higher petrol prices as a result of increased tension in the Middle East as the US and Iran are unable to agree on a peace deal that will result in the opening of the Strait of Hormuz.

Earlier today, global crude oil prices jumped by 7% with the cost of Brent Crude, identical to Nigeria's Bonny Light Crude rising to $101 a barrel. This is as a result of ongoing tension, with Washington and Tehran unable to agreed a peace settlement that will end their ongoing spat and open the Strait of Hormuz to maritime traffic.

Most of the uncertainty in the market comes from Iran's closing of the Straits of Hormuz to shipping as the narrow passage is the conduit through which 20% of the world's crude oil is shipped. Countries including Saudi Arabia, Kuwait, United Arab Emirates, Iraq, Oman, Qatar and Bahrain all ship their oil through this shipping lane.

President Donald Trump of the US, responded by saying he would mount a blockade of his own, leading to calls for peace talks, which were orchestrated by Pakistan. However, more than 12 hours of face-to-face negotiations between the US  and Iran ended without agreement in Islamabad yesterday, leaving a fragile two-week ceasefire as the only barrier between diplomacy and a return to war.

Pakistan, which spent weeks positioning itself as a mediator. had succeeded in bringing both sides into the same room. However, Pakistani officials acknowledge the harder phase now begins, as the real challenge is getting American and Iranian negotiators back into talks before their differences explode into full-fledged war again.

Ishaq Dar, Pakistan's deputy prime minister and foreign minister, said: “Pakistan has been and will continue to play its role to facilitate engagements and dialogue between the Islamic Republic of Iran and the United States of America in the days to come."

These talks, the highest-level direct engagement between Washington and Tehran since the 1979 Islamic revolution, faltered over differences surrounding Iran’s nuclear programme. However, US vice president James David Vance left a narrow opening for the resumption of talks.

He said: “The simple fact is that we need to see an affirmative commitment that they will not seek a nuclear weapon, and they will not seek the tools that would enable them to quickly achieve a nuclear weapon. We leave here with a very simple proposal, a method of understanding that is our final and best offer. We’ll see if the Iranians accept it.

Mr Vance, led the American delegation to the talks alongside special envoy Steve Witkoff and US President Donald Trump’s son-in-law Jared Kushner. US officials said that Iran had entered negotiations misreading its leverage, believing it held advantages that, in Washington’s assessment, it did not.

According to these officials, Mr Vance spent much of his time during the talks correcting what they described as Iranian misperceptions about the US position, asserting that no deal would be possible without a full commitment on the nuclear issue. Officials also suggested that President Trump’s subsequent announcement of a blockade in the Strait of Hormuz was not an impulsive reaction but a pre-planned step aimed at removing the waterway as an Iranian bargaining tool and forcing the nuclear issue back to the centre of any future talks.

Abbas Araghchi, Iran's foreign minister added: “When just inches away from an Islamabad MoU, we encountered maximalism, shifting goalposts, and blockade. Zero lessons learned. Good will begets good will and enmity begets enmity.”

Higher crude oil prices could lead to more expensive petrol in Nigeria. At the moment, petrol is currently being sold in Nigeria between N1,290 and N1,350 per litre across filling stations but since the current crisis began, prices have risen four times and could climb higher again of the cost of crude oil soars.