Oil plunges 11% as Iran opens Strait of Hormuz

Oil prices tumbled sharply on Friday, falling about 11% after Iran signalled that shipping through the Strait of Hormuz would remain open during an ongoing ceasefire, easing fears of supply disruption in one of the world’s most critical chokepoints.

Brent crude dropped $10.59, or 10.7%, to $88.80 a barrel by 1340 GMT, after hitting an intraday low of $87.71. U.S. West Texas Intermediate (WTI) fell $10.80, or 11.4%, to $83.89, touching $83 earlier in the session. Both benchmarks slid to their lowest levels since March 11.

The sell-off followed comments from Iran’s foreign minister confirming that commercial vessels could continue to pass through the Strait of Hormuz, a vital artery for global oil flow, during the remaining ceasefire period.

Iran’s foreign minister Abbas Araghchi said on X: “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.”

Prices had already been under pressure earlier in the day amid signs of easing geopolitical tensions. Reports of possible fresh talks between the United States and Iran over the weekend, alongside a 10-day ceasefire between Lebanon and Israel, lifted investor expectations that the broader Middle East conflict could de-escalate.

U.S. President Donald Trump added to the optimism, saying Tehran had indicated a willingness to forgo nuclear weapons ambitions for more than two decades.

“We’re going to see what happens. But I think we’re very close to making a deal with Iran,” Trump told reporters outside the White House on Thursday.

Despite the easing rhetoric, a U.S. official told Reuters that a military blockade of Iran involving more than 10,000 personnel remains in place, underscoring that risks have not fully dissipated.

Market analysts cautioned that while the reopening of the Strait is a positive signal, supply conditions, particularly in Europe, may remain tight in the near term. Shipping timelines mean it could take weeks before the impact of improved flows is fully reflected in physical markets.