Global oil prices fell sharply on Friday after Iran announced that the Strait of Hormuz is now “completely open” for commercial shipping during the ongoing ceasefire with the United States, according to Euro News.
The announcement was made by Iran’s Foreign Minister Abbas Araghchi in a message shared on social media. He said the reopening of the vital waterway was in line with the broader ceasefire linked to tensions in Lebanon.
Markets reacted almost instantly. Within less than two hours, oil prices dropped by more than 10 percent, reflecting relief among traders after weeks of uncertainty. The U.S. benchmark, West Texas Intermediate (WTI), fell by over 12 percent to around 82 dollars per barrel, while Brent crude dropped about 10 percent to roughly 88 dollars.
The Strait of Hormuz, a narrow passage between Iran and Oman, is one of the world’s most important energy routes. Around one-fifth of global oil and gas flows through it, meaning any disruption can quickly send prices higher and shake global markets.
The positive mood extended beyond energy markets. Major U.S. stock indexes surged in early trading. The S&P 500 and Nasdaq both reached new record highs, rising more than one percent, while the Dow Jones Industrial Average climbed even higher, gaining over 1.7 percent.
U.S. President Donald Trump welcomed Iran’s move but stressed that pressure on Tehran would continue. He said the U.S. naval blockade of Iranian ports would remain in place until a final agreement is reached. Trump also suggested that negotiations are progressing quickly, though no details of a possible deal have been made public.
Despite the optimism, uncertainty remains. It is still unclear how quickly shipping traffic through the strait will fully return to normal levels. Markets are now betting that a broader resolution to the conflict could come before the end of the month.
With the trading week coming to a close, investors have limited time to react, leaving global markets highly sensitive to any new developments.
