Nigerian crude oil prices held firm near $120 per barrel on Tuesday, influenced by reports of advancing negotiations between the United States and Iran. Vice President JD Vance indicated that both nations desire to avoid armed conflict, suggesting progress in diplomatic efforts.

Bonny Light, Nigeria's primary crude grade, was trading around $117 per barrel. This development followed an announcement by Donald Trump that a military strike planned for Tuesday was being halted, though he cautioned that strikes would resume if no deal was reached.

In broader market movements, Brent crude futures saw a decrease of 82 cents, settling at $111.28 a barrel. Despite this dip, prices remained elevated, marking their highest point since May 5th. Similarly, WTI crude reached its highest level since April 30th.

The geopolitical tensions have had a significant impact on global supply chains. The Strait of Hormuz, a vital waterway through which approximately one-fifth of the world's oil and liquefied natural gas passes, is reportedly closed due to the conflict in the Middle East. The International Energy Agency has described this as the largest disruption to global oil supply on record.

Adding to the supply concerns, Chinese state refiners have reportedly reduced their output by over a million barrels per day since the conflict began. This reduction is attributed to weak refining margins and disruptions in crude supply. Processing rates for Chinese state-owned refineries stood at 8.4 million barrels per day (bpd) in May, down from 8.6 million in April and 9.5 million in March.