Oil Falls 11% After Iran’s Foreign Minister Declares Strait Of Hormuz Fully Open

Oil prices fell by about 11% on Friday, extending earlier losses, after Iran’s Foreign Minister, Abbas Araghchi, announced that passage for all commercial vessels through the Strait of Hormuz was fully open for the remainder of the ceasefire period.

Brent crude futures dropped $10.59, or 10.7%, to $88.80 a barrel at 13:40 GMT, after hitting a session low of $87.71.

U.S. West Texas Intermediate crude futures declined by $10.80, or 11.4%, to $83.89 a barrel, after touching $83. Both benchmarks were trading at their lowest levels since March 11.

“Comments from Iran’s foreign minister indicate a de-escalation as long as the ceasefire is in place. Now we need to see whether the number of tankers crossing the Strait increases substantially,” UBS analyst Giovanni Staunovo said, according to Reuters.

Prices had already fallen earlier in the session amid expectations of further talks between the United States and Iran over the weekend, as well as a 10-day ceasefire between Lebanon and Israel, raising hopes that the conflict in the Middle East may be nearing an end.

Addressing a key sticking point in negotiations, U.S. President Donald Trump said Tehran had offered not to possess nuclear weapons for more than 20 years.

“We’re going to see what happens. But I think we’re very close to making a deal with Iran,” Trump told reporters outside the White House on Thursday.

A U.S. official told Reuters shortly after the announcement that, despite the Strait reopening, a military blockade of Iran involving more than 10,000 personnel remains in effect.

While reopening the Strait is a step in the right direction, analyst Ole Hvalbye at SEB Research noted that the European market would remain tight for some time, as it takes roughly 21 days for shipments to travel from the Gulf to Rotterdam, the region’s main crude oil hub.

British Prime Minister Sir Keir Starmer welcomed the reopening of the Strait but emphasized the need for a lasting and workable solution. He said international leaders had delivered a unified message that the Strait must remain open without tolls or restrictions.

Starmer called for shipping to resume as soon as conditions permit to help mitigate the economic impact.

He also announced that France and the UK would lead an international mission to protect freedom of navigation “as soon as conditions allow,” describing it as strictly peaceful and defensive. He added that a planning conference would be held in London next week, with around a dozen countries expected to contribute assets to the mission.

French President Emmanuel Macron said the closure of the Strait of Hormuz had “very severe consequences” for the global economy. He welcomed recent developments, including the ceasefire between Iran and the United States, the ceasefire in Lebanon—which he stressed must be fully observed—and the reopening of the Strait.

“Diplomacy is taking us forward,” Macron said. He added that the group of countries involved is demanding the full, immediate, and unconditional reopening of the Strait by all parties, the restoration of pre-war free passage conditions, and opposition to any attempts to privatize the Strait or impose toll systems.