Global oil prices recorded a sharp decline on Monday after Donald Trump stepped back from threats to bomb Iranian power plants.

The development has sparked cautious optimism for the global economy threatened by the rising fuel prices.

The sudden shift followed signals of diplomatic engagement between the United States and Iran, prompting markets to quickly unwind the geopolitical risk premium that had driven crude prices above the $100 per barrel mark in recent days.

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President Donald Trump had on Monday said Washington and Tehran engaged in what he described as "productive" discussions over the weekend aimed at ending ongoing hostilities.

In a post on Truth Social, Trump added that he has ordered a temporary halt to planned military strikes on Iranian power infrastructure.

Following the fresh signal, Brent crude fell sharply, with traders reacting to reduced fears of supply disruption in the Middle East.

Brent crude which was priced for $112 per barrel yesterday fell sharply to $102.8 as of the time of filing this report, representing 8.3 per cent drop.

This presents a fresh hope for Nigerians reeling from the effect of rapidly growing fuel prices with pump price of premium motor spirit (PMS) otherwise known as petroleum selling above N1,400 per litre.

The petroleum price has almost doubled since the Middle East crisis began about four weeks ago, worsening the cost of living crisis in Nigeria.

However, the easing of tensions in the Middle East reduces the risk of a broader energy crisis, which could have had more severe consequences for Nigeria, including higher import costs and inflationary pressures.