By Our Correspondent
National News – Global oil prices fell sharply after Iran announced that the Strait of Hormuz would remain open to commercial shipping during a ceasefire agreement, easing fears of a major supply disruption that had recently pushed crude to multi-month highs.
The move, announced by Iranian Foreign Minister Abbas Araghchi, came after a regional ceasefire linked to Israel-Lebanon tensions, and triggered immediate reactions in global financial markets as Brent crude dropped to about $88 per barrel from levels above $98 earlier in the day.
Brent crude benchmark had earlier spiked above $100 during the conflict and peaked above $119 in March as fears grew that the strategic waterway, which carries about one-fifth of global oil and liquefied natural gas, could be closed.
Following the announcement that passage was “completely open”, US stock indices rose, with the S&P 500 up 0.8% and both the Nasdaq and Dow Jones Industrial Average gaining more than 1%, while European markets including the FTSE 100, DAX and CAC 40 also posted gains.
Analysts say the reopening reduces immediate geopolitical risk in the Middle East shipping lane, restoring confidence in energy supply chains and easing pressure on fuel, aviation, and fertiliser prices that had risen during the blockade period.
The development follows a ceasefire agreement between Israel and Lebanon that reduced regional tensions and allowed maritime traffic to resume through the Strait of Hormuz.
The key decision by Iran to keep the waterway open is seen as a strategic signal aimed at stabilising energy exports while maintaining diplomatic leverage.
The Strait, located between the Persian Gulf and the Gulf of Oman, is a critical chokepoint for global trade.
The announcement, made on Friday, had an immediate ‘how’ effect through algorithmic trading and investor sentiment, pushing equities higher and oil futures lower within hours.
Overall, the oil price plunge reflects how sensitive global energy markets are to geopolitical stability in the Middle East, especially around strategic shipping routes that influence inflation, transport costs, and global economic confidence.
