Oil drops sharply as Iran reopens Hormuz Strait

U.S. crude fell 11.4% to $83.85 per barrel, its lowest level since March 10, while Brent crude dropped 9% to $90.38 per barrel. The decline marked the second-largest one-day drop for both benchmarks since the start of the conflict.

Refined fuel markets also weakened, with heating oil futures, often seen as a proxy for jet fuel, falling 10%, and wholesale RBOB gasoline futures declining 5%.

Iran’s Foreign Minister Abbas Araghchi confirmed the move in a post on X, stating: “In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire, on the coordinated route as already announced by Ports and Maritime Organisation of the Islamic Rep. of Iran.”

It remains unclear whether the “coordinated route” implies additional conditions, including possible transit fees, or whether shipping companies will fully trust the announcement amid recent security threats in the region.

U.S. President Donald Trump welcomed the development, writing on Truth Social: “IRAN HAS JUST ANNOUNCED THAT THE STRAIT OF IRAN IS FULLY OPEN AND READY FOR FULL PASSAGE. THANK YOU!”

Markets reacted swiftly to the news, as easing concerns over supply disruptions boosted investor sentiment and sent equities higher.

Earlier, Qazinform News Agency reported that Iran announced on Friday the reopening of the strategic Strait of Hormuz to commercial vessels during a temporary Israel-Lebanon ceasefire, while U.S. President Donald Trump said a naval blockade targeting Iranian ports would remain “in full force” until a final agreement with Tehran is reached.