Iran’s foreign minister has announced that the Strait of Hormuz will remain open to all commercial vessels during the remaining period of the ceasefire, while U.S. President Donald Trump has claimed that Iran has agreed never to close the strait again—following these statements, global oil prices dropped by nearly 13% on Friday; at 10:50 a.m. Eastern Daylight Time (1450 GMT), Brent crude futures fell by $12.87, or 12.95%, to $86.52 per barrel after earlier touching $86.09, while U.S. West Texas Intermediate (WTI) crude futures declined by $13.50, or 14.26%, to $81.19 per barrel, having earlier dropped to $80.56, marking the lowest levels for both benchmarks since March 10 and the biggest single-day decline since April 8; the announcement to reopen the strait came after a ceasefire agreement in Lebanon, with Iran’s Foreign Minister Abbas Araghchi indicating that tensions may ease during the truce, as UBS analyst Giovanni Staunovo noted that the key factor to watch now is whether the number of oil tankers passing through the Strait of Hormuz increases significantly; meanwhile, signs of progress in diplomatic efforts emerged as an Axios reporter posted on X that the United States and Iran have advanced discussions on a three-page memorandum aimed at ending the conflict; expectations of further talks over the weekend, along with a 10-day ceasefire between Lebanon and Israel, had already pushed oil prices lower earlier in the session, as investors grew hopeful that the Middle East conflict may be nearing an end; addressing a major sticking point, Trump said Tehran has proposed not pursuing nuclear weapons for more than 20 years, and on Thursday he told reporters outside the White House that the U.S. is very close to reaching an agreement with Iran; on Friday, Trump also stated that the United States has restricted Israel from carrying out further airstrikes in Lebanon, adopting a noticeably firmer tone toward its long-time ally; however, despite the reopening announcement, a U.S. official told Reuters that a military blockade against Iran involving more than 10,000 troops remains in place; SEB Research analyst Ole Hvalbye said that while reopening the strait is a step in the right direction, volatility in Europe’s energy market may persist for some time, as it takes about 21 days for oil shipments from the Gulf region to reach Rotterdam, a major European energy hub; PVM Oil Associates analyst Tamas Varga warned that if a final agreement on curbing Iran’s nuclear ambitions and lifting U.S. sanctions fails to materialize, shipping through the Strait of Hormuz could once again be disrupted.
Oil prices drop 13 percent after Iran opens Strait of Hormuz
