Global oil prices fell sharply on Friday after Iran indicated that the Strait of Hormuz would remain open to commercial shipping during a temporary ceasefire in the Middle East.
Benchmark crude prices dropped by over 10 percent, with West Texas Intermediate (WTI) falling below $85 per barrel, while Brent crude eased to around $89 per barrel.
The decline followed remarks by Iran’s Foreign Minister, Abbas Araghchi, who said commercial vessels would be allowed to pass through the strategic waterway during a 10-day ceasefire involving Israel and Lebanon, including Iran-backed Hezbollah.
Oil markets had previously surged above $100 per barrel amid escalating tensions in the region, with Brent and WTI hitting multi-month highs due to fears of supply disruptions.
Analysts say the easing of restrictions on the Strait of Hormuz has reduced immediate concerns over global oil supply shortages. The strait is a vital maritime route, handling about one-fifth of global oil and liquefied natural gas shipments.
Market experts noted that oil futures are now trending downward, with projections suggesting further declines if geopolitical stability holds, potentially easing inflationary pressure worldwide.
However, shipping companies remain cautious despite the announcement. Some operators are still assessing risks before resuming full operations in the region due to lingering security concerns.
Industry stakeholders also warned that uncertainties remain around maritime safety, including the risk of naval mines and unclear operational guidelines during the ceasefire period.
The Strait of Hormuz remains one of the most sensitive chokepoints in global energy trade, making developments in the region closely watched by markets and governments worldwide.
