Global oil prices fell sharply on Friday, dropping by more than 10 per cent after Abbas Araghchi announced that the Strait of Hormuz would remain fully open during the ongoing ceasefire with the United States, while stock markets recorded strong gains.
In a post on X, Araghchi stated that “passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of the ceasefire.”
The vital shipping route, which typically carries about one-fifth of the world’s crude oil, had faced disruptions since the outbreak of hostilities involving the US and Israel, pushing prices close to $120 per barrel and raising concerns over global economic stability.
Following the announcement, both Brent crude and West Texas Intermediate fell below $90 per barrel, reflecting immediate market reactions.
Kathleen Brooks, research director at XTB, noted that the development had an instant impact on financial markets, adding that it offered renewed optimism that the conflict could ease and supply chains begin to stabilise.
Wall Street responded positively, with major indices such as the S&P 500 and Nasdaq Composite extending recent gains after hitting record highs the previous day.
Uncertainty remains, however, over whether the statement refers to a 10-day ceasefire involving Lebanon and Israel or an earlier two-week truce between Iran and the United States that commenced on April 8. Despite this, the announcement has strengthened expectations of further diplomatic engagement, even as US President Donald Trump maintains that restrictions on Iranian ports are still in place.
Meanwhile, Emmanuel Macron and Keir Starmer are leading discussions among allies on deploying a multinational force to safeguard trade routes through the Strait of Hormuz once hostilities cease.
Market analysts highlighted that the rapid rebound in equities, particularly the S&P 500, has caught many investors off guard, forcing some to re-enter positions at higher costs amid renewed confidence and fear of missing out.
European markets also advanced, with Frankfurt and Paris posting gains, while Asian markets closed mostly lower after recent record highs in some indices.