World crude oil prices dropped on the news of the release of US oilmen Cody Oswald and Russell Spell and British security expert John Hudspith. A long-running campaign of guerilla attacks on Nigeria’s oil industry has cut production by more than a fifth.
Government officials confirmed that the men had been handed over to officials in Warri in the dead of night and were said to be in good health.
Both Nigerian authorities and the kidnappers, a group calling itself the Movement for the Emancipation of the Niger Delta (MEND), said that no deal had been struck and no ransom had been paid.
The hostages were among a group of nine foreign workers kidnapped on February 18 by heavily-armed guerillas fighting for autonomy and control of the region's oil resources. The other six captives were released after just a week.
Western reaction
US and British officials welcomed the news and expressed gratitude to Nigerian authorities for facilitating the men's safe release.
In a statement released by the British Foreign Office, Foreign Secretary Jack Straw said he was "delighted".
"I would like to extend my thanks to the Nigerian government for their help in securing the release of all of the hostages," he said.
A statement from the US embassy in Abuja also praised Nigerian officials for their help. "The safe release of the hostages is a first step in opening up dialogue to explore and implement long term solutions for the region," it added.
Ongoing struggle
A spokeswoman for Nigeria's President Olusegun Obasanjo said the president "hopes that those who have perpetrated this act have now seen the futility of their action and will choose the path of dialogue and due process in resolving problems".
In a defiant statement sent from an email address used by MEND, the kidnappers warned that the government and oil companies should expect continued attacks.
"The release of the hostages is not an indication of a cessation of our attacks against the oil industry and its workers," the statement said.
"They have been released at the instance of communities in the vicinity of Gbaramatu which invited us in the first place," it said. "These communities are satisfied that they will be no longer attacked by the Nigerian military.”
The statement added that as many as 800 guerilla fighters were used in the operation to keep the hostages captive and now would “be put to better use attacking oil facilities that are still functional and workers found on such facilities".
Crude prices
Although world oil prices dropped slightly on the news of the hostages' release, concerns of oil supply from Nigeria kept the price above US$64.0 dollars per barrel in New York.
"The release raised hopes that there may be a more peaceful solution to the crisis in Nigeria," analysts at the Sucden brokerage firm said.
Nigeria, which is Africa's biggest oil producer with exports of around 2.5 million barrels per day, has lost production equivalent to 543,000 barrels per day because of the crisis.
Despite the vast oil revenues, the majority of the Nigeria's 130-million strong population lives in abject poverty on less than one dollar a day.
That has created widespread resentment against government and the oil companies especially in the heartland of the oil and gas sector, the Niger Delta, where the 14-million strong Ijaw ethnic group is dominant.
There is strong sentiment within the community to create an oil-rich independent state.