Oil prices fell sharply on Friday while global equity markets moved higher after Iran signaled that the Strait of Hormuz remains open to commercial shipping. The announcement eased immediate concerns about disruptions in one of the world’s most critical energy transit routes, which has been under intense scrutiny amid escalating regional tensions. Traders interpreted the development as a potential stabilizing signal in a conflict that has already caused significant volatility in global oil markets.
Iranian Foreign Minister Seyed Abbas Araghchi stated in a post on social media that the Strait of Hormuz is “completely open.” At the same time, he noted that vessels transiting the narrow waterway must follow a “coordinated route” established by Iranian maritime authorities. While the statement reassured markets that shipping would continue, it also suggested that Iran intends to maintain a level of operational control over traffic passing through the strategic chokepoint.
The Strait of Hormuz is one of the most important energy corridors in the world, with a substantial portion of global crude oil and liquefied natural gas shipments passing through it daily. Historically, even the risk of disruption in the strait has been enough to trigger sharp price swings in energy markets, given its central role in global supply chains.
Following Iran’s remarks, oil markets reacted immediately. U.S. crude futures for May delivery dropped 11.1% to $84.26 per barrel, while Brent crude for June fell 10.5% to $88.95 per barrel. The decline reflected reduced fears of an immediate supply shock, although analysts noted that broader uncertainties remain unresolved.
The market reaction came shortly after comments from President Donald Trump, who said late Thursday that the conflict involving Iran, which began on February 28, “should be ending pretty soon.” After Iran’s announcement regarding the Strait of Hormuz, Trump thanked the country for keeping the waterway open. He also stated that a U.S. naval blockade of Iranian ports would remain in “FULL FORCE” until a formal agreement is reached, signaling that tensions between the two sides have not been fully resolved.
At the same time, diplomatic activity continued across the broader region. Israel and Lebanon agreed to a 10-day ceasefire that began Thursday afternoon, offering a temporary pause in hostilities that have included Israeli strikes on Hezbollah positions in Lebanon. The conflict has contributed to heightened instability in the region, further complicating energy security concerns.
President Trump also indicated that Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun would be invited to the White House. He described the potential meeting as a rare opportunity for direct dialogue between the two countries, suggesting it could mark an important step toward longer-term de-escalation.
The U.S. State Department said that discussions between regional parties are ongoing, focusing on conditions for sustained stability, including border security and national sovereignty. Officials also raised concerns about armed groups operating in Lebanon and emphasized the need for stronger state control in affected areas.
Despite the positive market response, analysts warned that risks to global oil supply remain elevated. ING analysts noted that prices had already been trending lower in anticipation of possible diplomatic progress, but stressed that physical supply conditions remain tight. They estimated that around 13 million barrels per day of oil supply has been impacted due to rerouting and restricted tanker movement.
Analysts further cautioned that continued restrictions in the Strait of Hormuz, or a breakdown in diplomatic talks, could quickly reverse recent market gains and renew upward pressure on energy prices.
