Global oil prices plunged on Friday after Iran and the United States moved to temporarily reopen the Strait of Hormuz, removing restrictions on one of the world’s most critical energy shipping chokepoints and triggering a rapid unwind of risk premiums that had driven crude higher in recent months.
Brent crude futures, the global benchmark, fell 8.8 per cent to $90.63 a barrel, while U.S. West Texas Intermediate (WTI) dropped 11.1 per cent to $84.14 a barrel, marking one of the heaviest daily declines since the onset of geopolitical tensions in late February.
Although prices later rebounded from intraday lows, the market remained firmly in negative territory as traders reassessed supply risk assumptions and inflation expectations.
The selloff followed confirmation that commercial shipping through the Strait of Hormuz would resume under a temporary ceasefire arrangement linked to broader de-escalation efforts between Washington and Tehran.
“In line with the ceasefire in Lebanon, the passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of ceasefire,” Iran’s foreign minister Abbas Araghchi said on social media platform X.
U.S. President Donald Trump also confirmed the development, describing the reopening as a positive signal for global trade stability.
“IRAN HAS JUST ANNOUNCED THAT THE STRAIT OF IRAN IS FULLY OPEN AND READY FOR FULL PASSAGE. THANK YOU!” Trump wrote.
The reopening effectively removes constraints on a waterway that typically handles around one-fifth of global oil flows, immediately easing concerns about supply disruptions that had previously pushed crude prices as high as $120 a barrel during the height of the conflict.
