Global Crude Prices Fall to Three-Year Low as Local Fuel Costs Decline

Oil prices have declined for the third straight day, dropping nearly 3% to their lowest level in three years, signaling a further decrease in local energy costs.

Brent crude, the international benchmark, fell to $68.33 on Wednesday, its lowest since December 2021, according to the Financial Times. Similarly, West Texas Intermediate (WTI), the U.S. crude blend, saw a more than 4% decline, reaching $65.22.

The drop followed a report from the U.S. Energy Information Administration (EIA) showing a larger-than-expected rise in American crude oil stocks, influenced by President Donald Trump’s “drill baby” policy.

The crude price slump also comes amid concerns over a potential economic slowdown after Trump confirmed the implementation of 25% import tariffs on Canada, Mexico, and China.

U.S. crude inventories increased by 3.6 million barrels last week, far exceeding analyst projections. The EIA report is the latest in a series of indicators pointing to weakening demand.

“The key worry for markets at the moment is Trump’s tariffs, the retaliation from affected countries, and what will happen next,” said Callum Macpherson, head of commodities at Investec. He added that the price was “at risk of a deeper correction.”.

Wednesday’s decline added to losses that began on Monday after OPEC+, led by Saudi Arabia, surprised markets by announcing it would move forward with a previously delayed plan to increase oil production starting in April.

The decision will see eight member countries, including Saudi Arabia and Russia, boost production by a combined 120,000 barrels per day in April and by a total of 2.2 million barrels per day over the next 18 months.

The drop in crude prices presents both challenges and opportunities for oil-producing nations like Nigeria.

Nigeria’s economy relies heavily on crude oil sales, with the government projecting N19.6 trillion in revenue for the 2025 fiscal year based on a benchmark oil price of $75 per barrel.

However, the decline in crude prices could also lead to lower local fuel costs. Currently, Premium Motor Spirit (PMS) prices range between N860 and N990 per litre, but continued price drops could result in further reductions.