[IMG alt="Oil prices Strait of Hormuz open Iran declaration sends crude plunging 12% as ceasefire hopes grow and supply fears ease across global markets.
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Oil prices dropped sharply on Friday after Iran’s foreign minister declared the Strait of Hormuz “completely open,” triggering a significant rally in energy markets that had been under severe strain since the conflict began nearly seven weeks ago.
U.S. crude oil futures for May delivery fell nearly 12% to close at $83.85 per barrel, while international benchmark Brent crude for June delivery lost 9%, settling at $90.38 per barrel.
The moves represented some of the largest single-day declines in oil prices during the entire conflict.
The announcement came from Iranian Foreign Minister Seyed Abbas Araghchi, who posted on social media that the strait is open to vessel traffic.
He specified, however, that ships traveling through the waterway must follow a “coordinated route” prescribed by Iran’s maritime authorities.
The statement stopped short of an unconditional reopening. Iran’s requirement that vessels follow an Iranian-prescribed route signals that Tehran intends to retain a degree of control over the waterway even as it signals a willingness to allow commercial traffic to resume.
Trump responded by thanking Iran for opening the strait, framing the development as a positive step. However, he made clear that the U.S. naval blockade of Iranian ports would remain in “full force” until the United States reaches a formal deal with Iran.
That distinction matters significantly for energy markets. While the announcement suggests oil could begin to move through the strait again, the broader standoff over the blockade and Iran’s nuclear program remains unresolved.
The oil price collapse accelerated after Trump announced late Thursday that Israel and Lebanon had agreed to a 10-day ceasefire that took effect Thursday evening.
Israel has been conducting military operations in Lebanon targeting Hezbollah, the Iran-backed militant group. That parallel conflict had been one of the central sticking points in U.S. and Iran negotiations, with Iran demanding a broader regional ceasefire as a condition for any agreement.
The Lebanon truce raised hopes that the diplomatic logjam could be broken, allowing peace talks between Washington and Tehran to gain more serious traction.
Trump said Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun would be invited to the White House for what he described as the first meaningful talks between the two countries since 1983. The U.S. State Department said both sides aimed to create conditions for lasting peace, including mutual recognition of sovereignty, improved border security, and a reaffirmation of Israel’s right to self-defense.
Despite the sharp decline in prices, analysts caution that the fundamental supply situation has not yet meaningfully improved.
ING analysts said in a note that oil prices began drifting lower on expectations that the U.S. and Iran could extend their ceasefire by another two weeks and potentially restart peace talks.
However, they warned that the physical market is becoming tighter every day that passes without an actual restart of oil flows through the Strait of Hormuz.
ING estimates that roughly 13 million barrels per day of supply has been disrupted when accounting for pipeline rerouting and limited tanker movements, a figure that could rise further if the U.S. naval blockade remains in effect.
The analysts also flagged what they described as the key upside risk for oil prices: a breakdown in peace talks between the U.S. and Iran. They noted that the two sides’ demands remain significantly apart, making such a scenario realistic rather than remote.
The convergence of the Iran strait announcement, the Israel-Lebanon truce, and Trump’s comments that the war “should be ending pretty soon” has created a window of optimism in global energy markets that had been under extraordinary pressure for weeks.
Whether that optimism translates into a genuine and sustained easing of the supply crisis depends on whether oil actually begins flowing through the Strait of Hormuz in meaningful volumes and whether the broader peace process produces a durable agreement.
Until both conditions are met, analysts warn that the apparent relief in prices could prove premature.
The post Oil Plunges Below $84 as Iran Declares Strait of Hormuz Open During Ceasefire appeared first on .
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Oil prices dropped sharply on Friday after Iran’s foreign minister declared the Strait of Hormuz “completely open,” triggering a significant rally in energy markets that had been under severe strain since the conflict began nearly seven weeks ago.
U.S. crude oil futures for May delivery fell nearly 12% to close at $83.85 per barrel, while international benchmark Brent crude for June delivery lost 9%, settling at $90.38 per barrel.
The moves represented some of the largest single-day declines in oil prices during the entire conflict.
Iran’s Foreign Minister Announces Hormuz Open
The announcement came from Iranian Foreign Minister Seyed Abbas Araghchi, who posted on social media that the strait is open to vessel traffic.
He specified, however, that ships traveling through the waterway must follow a “coordinated route” prescribed by Iran’s maritime authorities.
The statement stopped short of an unconditional reopening. Iran’s requirement that vessels follow an Iranian-prescribed route signals that Tehran intends to retain a degree of control over the waterway even as it signals a willingness to allow commercial traffic to resume.
Trump Welcomes the Opening but Keeps Blockade in Place
Trump responded by thanking Iran for opening the strait, framing the development as a positive step. However, he made clear that the U.S. naval blockade of Iranian ports would remain in “full force” until the United States reaches a formal deal with Iran.
That distinction matters significantly for energy markets. While the announcement suggests oil could begin to move through the strait again, the broader standoff over the blockade and Iran’s nuclear program remains unresolved.
Israel-Lebanon Ceasefire Fuels Broader Optimism
The oil price collapse accelerated after Trump announced late Thursday that Israel and Lebanon had agreed to a 10-day ceasefire that took effect Thursday evening.
Israel has been conducting military operations in Lebanon targeting Hezbollah, the Iran-backed militant group. That parallel conflict had been one of the central sticking points in U.S. and Iran negotiations, with Iran demanding a broader regional ceasefire as a condition for any agreement.
The Lebanon truce raised hopes that the diplomatic logjam could be broken, allowing peace talks between Washington and Tehran to gain more serious traction.
Trump said Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun would be invited to the White House for what he described as the first meaningful talks between the two countries since 1983. The U.S. State Department said both sides aimed to create conditions for lasting peace, including mutual recognition of sovereignty, improved border security, and a reaffirmation of Israel’s right to self-defense.
Physical Oil Markets Remain Tight Despite Price Drop
Despite the sharp decline in prices, analysts caution that the fundamental supply situation has not yet meaningfully improved.
ING analysts said in a note that oil prices began drifting lower on expectations that the U.S. and Iran could extend their ceasefire by another two weeks and potentially restart peace talks.
However, they warned that the physical market is becoming tighter every day that passes without an actual restart of oil flows through the Strait of Hormuz.
ING estimates that roughly 13 million barrels per day of supply has been disrupted when accounting for pipeline rerouting and limited tanker movements, a figure that could rise further if the U.S. naval blockade remains in effect.
The analysts also flagged what they described as the key upside risk for oil prices: a breakdown in peace talks between the U.S. and Iran. They noted that the two sides’ demands remain significantly apart, making such a scenario realistic rather than remote.
A Pivotal Moment for Global Energy Markets
The convergence of the Iran strait announcement, the Israel-Lebanon truce, and Trump’s comments that the war “should be ending pretty soon” has created a window of optimism in global energy markets that had been under extraordinary pressure for weeks.
Whether that optimism translates into a genuine and sustained easing of the supply crisis depends on whether oil actually begins flowing through the Strait of Hormuz in meaningful volumes and whether the broader peace process produces a durable agreement.
Until both conditions are met, analysts warn that the apparent relief in prices could prove premature.
The post Oil Plunges Below $84 as Iran Declares Strait of Hormuz Open During Ceasefire appeared first on .
Continue reading...