Global oil markets reacted sharply on Friday after Iran announced that the Strait of Hormuz would be fully open to commercial shipping for the duration of the current ceasefire in its conflict involving the United States and Israel.
Brent crude prices dropped significantly following the statement, falling to around $88 per barrel after trading above $98 earlier in the day. The waterway, a critical route for global energy supplies, typically handles about one-fifth of the world’s oil and liquefied natural gas shipments, making any disruption highly sensitive for markets.
Iranian Foreign Minister Abbas Araghchi said that all commercial vessels would be allowed to pass through the strait during the ceasefire period. The announcement triggered a rally in global stock markets, with major indices in the United States and Europe posting gains. The S&P 500 rose 1.2 percent, while France’s CAC 40 and Germany’s DAX each climbed about 2 percent. In London, the FTSE 100 ended the day 0.7 percent higher.
Despite the optimism, uncertainty remains over how quickly shipping activity will return to normal. Maritime organizations and shipping companies have urged caution, citing ongoing safety concerns. The International Maritime Organization said it was assessing whether the reopening ensures safe and unrestricted navigation. Early tracking data indicated that vessel movement through the strait remained limited.
Industry groups have also raised concerns about potential risks in the area. Shipping association BIMCO warned that threats such as sea mines could still pose dangers, advising operators to carefully evaluate conditions before resuming transit. Some tanker companies have said they would delay returning to the route until safety is fully assured.
The strait has been largely closed since late February, when military action in the region led to a sharp reduction in tanker traffic. This disruption pushed oil prices above $100 per barrel at one stage and raised concerns about global fuel supplies. The closure also affected the transport of fertilisers, adding pressure on agricultural markets and increasing the risk of higher food prices worldwide.
While fuel costs have begun to ease slightly in some markets, analysts caution that supply chains may take months to stabilise even if the ceasefire holds. The limited timeframe of the truce may also restrict how many vessels can pass through the strait before conditions change again.
United States President Donald Trump welcomed Iran’s move but said the US naval blockade on Iranian ports would remain in place until a broader agreement is reached. This has added another layer of uncertainty, leaving traders and shipping firms closely monitoring developments in the coming days.
