Oil Prices Plummet as Iran Reopens Strait of Hormuz

Oil prices plummeted on Friday after Iran declared the Strait of Hormuz “completely open” to commercial vessels for the remainder of the Israel-Lebanon ceasefire, according to multiple international news sources.

The announcement by Iranian Foreign Minister Abbas Araghchi came amid a ceasefire between Israel and Lebanon, triggering a sharp decline in global oil benchmarks. Brent crude, the international standard, fell to $88 per barrel from above $98 earlier in the day, while U.S. West Texas Intermediate dropped to $84.95, a decline of over 10%.

The Strait of Hormuz, a narrow waterway south of Iran through which approximately one-fifth of the world’s oil and liquefied natural gas typically flows, had been effectively closed by Iran since late February when the U.S. And Israel launched military strikes in the region. Tanker traffic had slowed to a trickle, reducing global oil supply and contributing to prices that had previously peaked above $119 per barrel in March.

Despite Iran’s declaration of open passage, international shipping groups expressed caution. BIMCO, the global shipping association, advised operators to continue verifying the situation, citing ongoing risks in the region. Maritime analysts noted that while Iran announced the strait was open via a coordinated route already established by its Ports and Maritime Organisation, it remained unclear whether vessels would need to pay tolls or if they would trust the assurance given recent threats and attacks on shipping in the area.

U.S. President Donald Trump welcomed Iran’s statement on his social media platform, Truth Social, writing: “IRAN HAS JUST ANNOUNCED THAT THE STRAIT OF IRAN IS FULLY OPEN AND READY FOR FULL PASSAGE. THANK YOU!” However, he later clarified that the U.S. Naval blockade against Iran would remain in full force until a broader transaction regarding Iran’s enriched uranium was 100% complete.

Global financial markets reacted positively to the news. The S&P 500 index closed up 1.2%, while France’s Cac 40 and Germany’s Dax each ended the day around 2% higher. London’s FTSE 100 rose 0.7%. Analysts noted that the drop in oil prices alleviated inflationary pressures and supported broader risk-on sentiment across equity markets.

Iran’s foreign ministry later clarified that the country had no plans to transfer enriched uranium to the United States, calling such a move “not an option.” This came after Trump told CBS News that Iran had “agreed to everything” and would work with the U.S. To remove its enriched uranium, suggesting U.S. Officials might resume negotiations with Iran in Pakistan within days.

Prior to the conflict, Brent crude had been trading below $70 per barrel. The recent price decline marked a significant reversal from the wartime spike, though prices remained above pre-conflict levels. Industry observers noted that sustained stability in the Strait of Hormuz would be necessary for a more durable return to normalized global oil flows, and pricing.