Oil prices dropped sharply on Friday after Iran announced that the Strait of Hormuz — the narrow waterway linking the Persian Gulf to the Arabian Sea through which roughly a fifth of the world's oil and liquefied natural gas normally flows — was "completely open" to commercial vessels for the duration of an ongoing ceasefire. Brent crude fell to around $88 a barrel from above $98 earlier in the day, extending a broader market rally that saw major US stock indices rise by more than 1% and European exchanges climb by over 2%.
Iranian Foreign Minister Abbas Araghchi announced on social media that passage through the strait was open "for the remaining period of ceasefire," specifying that ships must follow routes designated by Iran's Ports and Maritime Organisation. It was not immediately clear whether the ceasefire he referred to was the two-week Iran-US truce that began on April 8, or the separate ten-day Israel-Lebanon ceasefire announced by US President Donald Trump on Thursday. Trump welcomed the move effusively on Truth Social, thanking Iran and declaring that Tehran had agreed "to never close the Strait of Hormuz again." However, he emphasised that the US naval blockade of Iranian ports would remain "in full force and effect" until a permanent deal is finalised, adding that most negotiating points were already agreed and that talks could move quickly.
A significant operational challenge remains: the Iranian Revolutionary Guard Corps laid sea mines in the strait during the conflict, and their removal will be essential before commercial traffic can safely resume. Trump said Iran, with US assistance, had removed or was in the process of removing the mines. The US Navy already has mine-clearing assets in the region and has dispatched two additional specialised vessels from Japan. Despite the announcement, shipping operators were cautious. One unnamed tanker operator told reporters it "doesn't change anything" immediately and said the company would not be "the first to go through the Strait." Stena Bulk, which operates oil tankers in the area, said it was monitoring developments and would not transit until satisfied it was safe.
The Strait of Hormuz was effectively closed after US and Israeli military strikes on Iran began in late February, sending oil prices from under $70 a barrel to a peak above $119 in March. The closure disrupted not only fuel supplies but also a third of global trade in key fertiliser chemicals, raising concerns about food prices. Economists cautioned that even with the strait reopening, supply chains will take months to recover, and the current ceasefire window — estimated at roughly nine days — may not be sufficient for tanker traffic to return to pre-war levels. The International Monetary Fund this week downgraded its global growth forecasts and warned of recession risks if the conflict continued.
France and Britain separately convened a multinational video conference on Friday at which more than a dozen countries offered to contribute assets to a potential international maritime security mission for the strait. French President Emmanuel Macron and British Prime Minister Keir Starmer said a further military planning conference would be held in London next week. Trump, however, signalled he had told NATO to "stay away," and the mission's future scope is likely to depend heavily on whether a permanent Iran-US deal is reached in the coming days.