Global oil prices have fallen sharply after Iran announced that the Strait of Hormuz will remain open for commercial shipping during the ongoing ceasefire.
The price of Brent crude dropped to $88 per barrel, down from over $98 earlier in the day. The announcement eased fears of supply disruptions and stabilized energy markets.
Iran’s Foreign Minister, Abbas Araghchi, confirmed that all commercial vessels can pass through the waterway for the duration of the ceasefire.
The Strait of Hormuz plays a critical role in global energy supply. It connects the Gulf to the Arabian Sea and handles nearly 20% of the world’s oil and liquefied natural gas shipments.
Global financial markets reacted positively to the news. In the United States, the S&P 500 rose by 0.8%, while the Nasdaq and Dow Jones Industrial Average each gained more than 1%.
European markets also recorded strong gains. France’s CAC 40 and Germany’s DAX both climbed by over 2%, while the UK’s FTSE 100 rose by around 0.5%.
The Strait had been effectively closed since late February, following military strikes by the United States and Israel on Iran. This disruption limited the flow of oil and gas, pushing global prices higher.
Before the conflict, Brent crude traded below $70 per barrel. Prices surged past $100 and peaked above $119 in March due to supply shortages.
The spike in oil prices increased fuel costs worldwide, raising petrol and diesel prices for consumers. It also created concerns for airlines due to rising jet fuel costs, and for farmers as fertiliser supplies were disrupted.
With the reopening of this key shipping route, markets expect improved supply conditions and potential stabilization in energy prices.
