ISLAMABAD: (Web Desk) – Global oil prices dropped sharply on Friday after Iran announced it would reopen the Strait of Hormuz to commercial shipping, easing fears of prolonged supply disruptions and boosting stock markets across Europe and the United States.
Iran’s Foreign Minister Abbas Araghchi said the decision followed a ceasefire between Israel and Lebanon, confirming that all commercial vessels would be allowed safe passage through the vital energy corridor for the duration of the truce.
The waterway, which handles roughly one-fifth of global crude oil shipments, had faced disruptions since late February amid rising tensions linked to a US-Israeli offensive. At one stage, oil prices surged close to $120 per barrel, rattling global markets.
Following Tehran’s announcement, both Brent Crude and West Texas Intermediate prices fell below $90 per barrel. Brent later settled at $90.38, marking a significant 9.1 percent decline.
Russia bolsters its anti-drone defenses after Ukraine attacks key oil ports
Market analysts noted the immediate reaction, with Kathleen Brooks highlighting the swift impact on investor sentiment. Meanwhile, Angelo Kourkafas said markets were now moving past worst-case geopolitical scenarios and refocusing on economic fundamentals.
Wall Street extended its rally, with the S&P 500 hitting fresh highs, supported by optimism over easing geopolitical tensions and continued strength in the US economy.
European markets also closed higher, with major gains recorded in Frankfurt and Paris.
US President Donald Trump welcomed the reopening, saying negotiations with Tehran were close to completion with no major obstacles remaining. However, Iran quickly rejected claims that it would transfer its enriched uranium stockpile abroad.
Shipping companies cautiously welcomed the move. A spokesperson for Hapag-Lloyd described the development as positive but warned that clear instructions would be needed to safely manage vessel traffic, especially amid concerns about potential mines in the area.
Comments are closed, but trackbacks and pingbacks are open.