Global oil prices fell sharply after Iran announced that the Strait of Hormuz would remain fully open to commercial shipping for the duration of the ongoing ceasefire.
Brent crude dropped to around $88 per barrel, down from above $98 earlier in the day, reflecting easing concerns over supply disruptions. The Strait of Hormuz, a vital global energy corridor, typically handles nearly one-fifth of the world’s oil and liquefied natural gas shipments.
US President Donald Trump welcomed the announcement, though maritime and international bodies are still assessing the situation. Iranian Foreign Minister Abbas Araghchi confirmed that all commercial vessels would be allowed safe passage during the ceasefire period.
Global financial markets reacted positively, with major US indices such as the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average posting gains. European markets also rose, including France’s CAC 40 and Germany’s DAX.
Despite the positive response, concerns remain. The Baltic and International Maritime Council warned that risks in the region persist, particularly regarding potential maritime threats. Similarly, the International Maritime Organization said it is verifying the safety and compliance of navigation routes following Iran’s announcement.
Shipping activity through the strait had slowed significantly during the conflict, pushing oil prices above $100 earlier this year. While the reopening offers relief, experts caution that uncertainty in the region continues to pose risks to global energy markets.
