Oil plunges over 10 pc as Iran declares Hormuz open amid Lebanon ceasefire

Oil prices fell by more than 10 per cent on Friday while global markets rallied after Iran said the Strait of Hormuz was “completely open” for commercial vessels, easing concerns of a major disruption to global crude supplies.

Iranian foreign minister Abbas Araghchi said the key shipping lane would remain accessible during the ceasefire period linked to the Lebanon-Israel conflict announced a day earlier by US President Donald Trump.

“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 the ceasefire,” Araghchi said in a post on X. He added that ships must sail on the “coordinated route as already announced” by Iran’s Ports and Maritime Organisation.

Trump subsequently amplified the announcement on Truth Social, writing that the “Strait of Hormuz is completely open and ready for business and full passage”. However, he added that a US naval blockade targeting Iran would remain in force until negotiations between Washington and Tehran are completed.

“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,” Trump wrote, adding that the process should move quickly as “most of the points are already negotiated”.

The Strait of Hormuz, located between Iran and Oman, is among the world’s most critical energy chokepoints, with roughly one-fifth of global oil supply passing through it. Any disruption to shipping in the narrow channel typically sends energy prices sharply higher and triggers volatility across global markets.

Following confirmation that the route would remain open, oil prices dropped steeply, while equity markets surged on expectations that the global economy could avoid a worst-case supply shock.

On Wall Street, the S&P 500 rose 0.7 per cent, approaching another record high, while the Dow Jones Industrial Average climbed 1 per cent and the Nasdaq Composite gained 1 per cent. US stocks have rallied more than 11 per cent since late March amid optimism that tensions involving Iran would not escalate into a wider conflict capable of disrupting global trade and energy flows.

Analysts said the reopening of the Strait signals a temporary easing of geopolitical risk, although uncertainty remains over the durability of the ceasefire and the outcome of negotiations between the US and Iran.

With agency inputs