Oil prices plummeted more than 10% on Friday after Iran’s foreign minister said that the Strait of Hormuz will be open to all commercial shipping traffic for the duration of the ceasefire between Israel and Lebanon.
Prices for West Texas Intermediate crude fell over 10% to under $85 a barrel, while Brent crude oil prices dropped more than 10% to around $89 a barrel.
The plunge in oil prices comes after Iranian Foreign Minister Abbas Araghchi said the Strait of Hormuz was open for all commercial vessels for the remainder of the 10-day ceasefire between Israel and Lebanon. The ceasefire began on Thursday, and President Donald Trump told reporters the ceasefire would include Iran-backed Hezbollah.
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Trump said in a post on his Truth Social platform that the Strait of Hormuz is “COMPLETELY OPEN AND READY FOR BUSINESS AND FULL PASSAGE, BUT THE NAVAL BLOCKADE WILL REMAIN IN FULL FORCE AND EFFECT AS IT PERTAINS TO IRAN, ONLY, UNTIL SUCH TIME AS OUR TRANSACTION WITH IRAN IS 100% COMPLETE.”
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Oil prices surged over $100 a barrel since the Iran war began a month and a half ago, with WTI prices peaking at nearly $113 a barrel on April 6 and Brent crude prices reaching more than $119 a barrel on March 30.
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The oil price shock occurred after the Strait of Hormuz was effectively closed to commercial shipping amid the conflict due to the threat of Iranian attacks and mines.
The Strait of Hormuz is a key chokepoint between the Persian Gulf and Arabian Sea, as about one-fifth of the world’s oil and liquefied natural gas transits through the strait to destinations around the world.
Reuters contributed to this report.
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