President Muhammadu Buhari ‘Celebrates’ US President, Donald Trump’s Latest Controversial International Decision, Set To Reap Massively

By Joshua Amaugo May 9, 2018 15:58

President Muhammadu Buhari ‘Celebrates’ US President, Donald Trump’s Latest Controversial International Decision, Set To Reap Massively

Report reaching Post-Nigeria, indicates that President Muhammadu Buhari has expressed joy over the recent tough stance on Iran by the United States, US, President, Donald J. Trump, as Nigeria is bid to benefit from the crackdown; as it will significantly reduce Iran’s supply of crude, and may likely increase the price of crude oil in the international market.

Recall, that President Trump had in a statement yesterday, said that he will withdraw the US from an Obama-era nuclear agreement with Iran, calling it “decaying and rotten”, as he said the deal was “an embarrassment” to him “as a citizen”.

In response, Iran said it was preparing to restart uranium enrichment key, for making both nuclear energy and weapons.

Iran’s President, Hassan Rouhani, said: “The US has announced that it does not respect its commitments.

“I have ordered the Atomic Energy Organisation of Iran, to be ready for action if needed, so that if necessary we can resume our enrichment on an industrial level, without any limitations.”

He added that he would “wait a few weeks”, to speak to allies and the other signatories to the nuclear deal first.

“If we achieve the deal’s goals in cooperation with other members of the deal, it will remain in place”, he said.

Post-Nigeria however, gathered that President Trump’s decision is coming at a time when global supply of crude was already getting tight, and with the upcoming imposition of powerful sanctions on Iran, the price of crude will rise significantly at the international market, giving opportunity for other oil producing countries like Nigeria, to reap from the gains.

In 2016, Iran ramped up its oil production by 1 million barrels per day, after sanctions were lifted that year.

Energy Expert, Dan Eberhart, CEO, Oilfield Services Company, Canary LLC, drew a direct connection, stating that: “Withdrawing from the Iran nuclear deal, will support higher oil prices.”

He said that President Trump telegraphed the move, and oil prices shot up in recent weeks, as Traders anticipated it. Crude topped $70 a barrel this week, for the first time in nearly four years. Hours before Trump’s announcement, the Federal Government forecasters, raised their estimate for 2018 oil prices by 10.5%, to an average of $65.58 a barrel.

Crude oil prices swung wildly on Tuesday, eventually climbing back above $70 a barrel, later in the day.

Gasoline prices, which generally follow oil prices, have jumped to a national average of $2.81 a gallon.

A gallon of gas went for $2.34, a year ago. The typical family will spend about $200 more this summer driving season, according to the Oil Price Information Service.

“It will be more painful for motorists than the past two years — but nothing close to 2011 to 2014, when it was $3.40 to $3.60 a gallon”, said Tom Kloza, Global Head of Energy Analyst at OPIS.

He added: ‘’No one knows exactly how high prices will go. That will be determined by a range of factors, including how much Iranian crude is restricted by the sanctions, and whether other major producers — such as the United States — fill the gap.

“Another major question: Will tensions in the Middle East rise even further, now that the United States is leaving the Iran deal? Heightened geopolitical fears in the Middle East often raise prices.”

Presently, several US Military officials have raised increasing concerns of Iran on the cusp of an attack against Israel. It is not clear when an attack could come, nor what form it could take.

“The three or four-year period of quiet in terms of geopolitics impacting oil markets is over”, said Canary’s Eberhart.

Iran produced about 3.8 million barrels of oil per day in April, according to the latest S&P Global Platts OPEC survey. That is up from 2.9 million barrels per day, in January 2016, when the nuclear deal took effect.

Meanwhile, the implication of the US withdrawing from the deal to Nigeria, will lead to increment in supply and price of Nigeria’s crude, as it will accrue more funds for President Buhari to fulfill his 2015 campaign promises, and fund the much anticipated 2018 budget.

Trump’s announcement of the pull out yesterday, was reportedly welcomed by the Presidency, as it will favour Nigeria’s economy, which is solely dependent on oil.

Amidst the jubilation, the Naira on Tuesday gained a point to appreciate against the dollar at the parallel market, in Lagos.

The Nigerian currency closed at N361.6 against the dollar, stronger than N361.7 posted on Monday, while the Pound Sterling and the Euro exchanged at N502 and N470, respectively.

At the Bureau De Change, BDC, window, the Naira closed at N362 to the dollar, while the Pound Sterling and the Euro exchanged at N502 and N470.

Trading at the Investors’ window, saw the Naira appreciate at N360.64, stronger than N360.91 posted on Monday, and a reduction of 57 million dollars in transaction.

The Investors’ window traded 232.68 million dollars, on Monday, while Tuesdays’ transaction was 57.27 million dollars.

In Abuja, a dollar exchanged at N380, Euro N436, and Pound sterling N507, while in P/Harcourt, dollar to naira was pegged at N361.7, Euro N435, and Pound sterling N500.

In Kano, a dollar exchanged at N362.5, Euro N435, and Pound sterling N498.

Traders across board expressed optimism that the Naira would remain stable in the weeks ahead.

Naira has remained stable, due to aggressive interventions of the Central Bank of Nigeria, CBN, at the nation’s foreign exchange market.

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