Oil prices crashed more than 10% on Friday after Iran announced the Strait of Hormuz would remain open to commercial shipping for the duration of the current ceasefire. Brent crude plummeted from above $98 to $88 per barrel, while West Texas Intermediate dropped 12% to roughly $82 per barrel.
The dramatic price movement followed a statement from Iranian Foreign Minister Abbas Araghchi declaring the strategic waterway fully accessible to merchant vessels. The Strait of Hormuz, which connects the Persian Gulf to the Arabian Sea, typically handles one-fifth of global oil and liquefied natural gas shipments.
The passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire.
Abbas Araghchi, Iranian Foreign Minister
Global equity markets surged on the announcement. The S&P 500 and Nasdaq both reached new all-time highs, gaining more than 1% in early trading, while the Dow Jones Industrial Average climbed 1.7%. European markets posted even stronger gains, with the CAC 40 and DAX rising over 2%.
The strait has been effectively closed since US and Israeli military strikes against Iran in late February. Tanker traffic had slowed to a trickle, creating severe supply constraints that drove oil prices from under $70 per barrel before the conflict to peaks above $119 in March.
The BBC frames this as a market-driven story focused on price movements and verification processes, emphasizing maritime safety concerns and international oversight. Their coverage reflects Britain's role as a major financial center and maritime nation with interests in global shipping security.