Oil Prices Drop Over 10% as Iran Reopens Strait of Hormuz Amid Ceasefire

Global oil prices fell sharply on Friday after Iran announced the reopening of the Strait of Hormuz, easing concerns over supply disruptions. The move followed a temporary ceasefire between Israel and Hezbollah, which helped calm market fears of prolonged instability in the region.

Brent crude dropped by more than 11%, while U.S. West Texas Intermediate (WTI) also saw a decline of over 10% as traders responded to expectations of improved supply conditions. The Strait of Hormuz, a critical global energy route, handles nearly one-fifth of the world’s oil shipments, making any disruption highly impactful on global markets.

Iran’s foreign minister confirmed that the waterway would remain open for commercial shipping under coordinated routes during the ceasefire period. The announcement signaled a de-escalation in tensions, although actual shipping activity remains below normal levels due to ongoing uncertainties.

Despite the positive market reaction, analysts caution that the situation remains fragile. Any breakdown in the ceasefire could quickly reverse gains and push oil prices higher again. For now, markets are stabilizing, but geopolitical risks continue to influence global energy trends.