Oil prices plummet as Iran declares Strait of Hormuz open

Oil prices plummeted by more than 10 per cent on Friday, extending earlier losses, following an announcement from Iran’s foreign minister that the Strait of Hormuz remains open for all commercial vessels during the current ceasefire period, mirroring the ceasefire in Lebanon.

Brent crude futures LCOc1 dropped by $11.12, or 11.2%, to $88.27 a barrel at 13:11 GMT. US West Texas Intermediate crude futures CLc1 fell $11.40, or 12%, to $83.29 a barrel.

The fall in prices came after Iranian foreign minister Abbas Araghchi wrote 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.”

US president Donald Trump confirmed the news with his own post on Truth Social, writing: “Iran has just announced that the Strait of Iran is fully open and ready for full passage! Thank you!”

UBS analyst Giovanni Staunovo stated: “Comments from Iran’s foreign minister indicate a de-escalation as long as the ceasefire is in place, now we need to see also if the number of tankers crossing the Strait increases substantially.”

The market had already seen prices decline earlier in the day amid speculation of further talks between the US and Iran over the weekend, coupled with a 10-day ceasefire between Lebanon and Israel, fueling investor optimism that the wider Middle East conflict might be drawing to a close.

Adding to the diplomatic momentum, Donald Trump stated that Tehran had offered not to possess nuclear weapons for more than 20 years, addressing a significant point in ongoing discussions.

“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.