Oil prices drop 11% as Iran reopens Strait of Hormuz

Oil prices have fallen significantly after Iran opened the Strait of Hormuz for all commercial shipping for 10 days on Friday, following the Lebanon-Israel ceasefire.

Oil prices plunged by 11 percent amid hopes that the United States (U.S.) and the Islamic Republic could soon reach an agreement to end the war.

Oil prices at 1340 GMT were as follows:

• Brent Crude futures fell by $10.59 (10.7%) to $88.80 per barrel
• Reached a session low of $87.71 per barrel
• West Texas Intermediate (WTI) crude futures dropped by $10.80 (11.4%) to $83.89 per barrel
• Touched a low of $83 per barrel during the session
• Both benchmarks are at their lowest levels since March 11

Earlier, the Iranian Foreign Minister Abbas Araghchi announced the opening of the Strait, saying, “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.”

U.S. President Donald Trump welcomed the move and surprisingly described the Strait of Hormuz as “Strait of Iran”. However, he announced that the U.S. naval blockade of Iranian ports will continue until both countries reach an agreement to end the war.

Oil prices have seen a steady fall since Pakistan, acting as mediator, intensified its efforts to secure a ceasefire between the warring parties. Analysts say that if the number of tankers crossing the Strait increases, the oil prices could decline further.