Brent Drops to $86 as Iran, Oman Move to Reopen Strait of Hormuz
The price of Brent crude has fallen by nearly $9 per barrel in the past seven days, representing a decline of about 9.6%, after Iran and Oman resumed talks to restore navigation through the Strait of Hormuz.
Brent crude futures fell to $86.28 a barrel on Wednesday, August 26, down $2.30, or 2.6%. West Texas Intermediate crude also declined by $2.08, or 2.53%, to $80.29. The losses extended a sell-off on Tuesday when both benchmarks fell by more than 3%.
Brent had traded as high as $95.40 per barrel on August 20 before closing at $93.01 that day. At $86.28 on Wednesday, the benchmark was $9.12 below that intraday high.
Iran said it had resumed discussions with neighbouring Oman on managing traffic through the Strait of Hormuz amid mounting economic pressure from the administration of US President Donald Trump.
The renewed engagement has raised expectations that the strategic waterway could begin reopening, although it remains largely disrupted.
On Tuesday, both countries said they had discussed a framework for establishing a joint temporary navigational corridor through the strait and agreed to undertake a joint project to clear mines from the waterway.
Technical negotiations are expected to continue on a permanent shipping corridor, future management arrangements, and mechanisms for maritime traffic and navigation services.
The two countries have held intermittent discussions for weeks on how to manage traffic through the waterway. Before the conflict, the Strait of Hormuz carried roughly one-fifth of global oil and liquefied natural gas shipments. Any sustained disruption has been a major driver of higher crude prices.
The market retreat followed Washington’s announcement of tougher measures against Tehran.
On August 20, President Trump announced what he described as “economic warfare” against Iran, warning countries, businesses and financial institutions that provide Tehran with an economic lifeline that they would face severe consequences.
On Monday, the US expanded sanctions targeting dozens of individuals, entities and vessels linked to Iran’s oil, weapons and financial networks. The Trump administration said the measures were aimed at cutting off Iran’s economic lifelines and forcing it back to negotiations after months of military confrontation failed to produce a resolution.
For Nigeria, a sustained decline in crude prices could provide some relief from energy-driven cost pressures that have filtered through the domestic economy since the Iran conflict began.
During the period of elevated oil prices, petrol prices in some Nigerian markets rose above N1,200 per litre, increasing the cost of commuting and transporting goods.
Lower transportation costs could also help moderate food prices by reducing the expense of moving farm produce from rural areas to major consumption centres. This is significant because food inflation remains one of the strongest pressures on Nigerian households.
Latest data from the National Bureau of Statistics show headline inflation eased to 15.43% in July 2026 from 15.91% in June. However, food inflation rose to 20.31% year-on-year in July from 17.52% in June, while monthly food inflation accelerated to 5.56% from 3.75%.