KARACHI – Global energy markets sees immediate relief as oil prices dropped nearly 10% to $84 after reports that Iran reopened the Strait of Hormuz to commercial shipping during a ceasefire period.
Soon after much-awaited announcement by Iranian Foreign Minister Araghchi, crude oil prices plunged nearly 10% in wake of shock reports that Iran reopened Strait of Hormuz to commercial shipping during a ceasefire period, dramatically easing fears of a major supply disruption in the world’s most critical oil artery.
The announcement triggered immediate and aggressive sell-off across global benchmarks. Brent crude tumbled by about $8.46 (8.5%) to $90.93 per barrel, while US West Texas Intermediate (WTI) collapsed by roughly $8.87 (9.4%) to $85.82. The pressure intensified as trading progressed, with WTI later sliding further to around $84.00, marking an eye-watering decline of more than 11%.
Earlier today, Araghchi said under a ceasefire arrangement linked to developments in Lebanon, all commercial vessels would be allowed to transit the Strait of Hormuz for the duration of the ceasefire period. He added that shipping lanes would operate under pre-coordinated routes established by Iran’s Ports and Maritime Organisation, signaling a controlled reopening rather than an unrestricted surge.
US President Donald Trump publicly welcomed the development on Truth Social, claiming Iran had effectively reopened the strait and declaring it “fully open and ready for full passage”.
Strait of Hormuz remains one of the most strategically sensitive chokepoints in the world. A narrow but indispensable passage linking the Persian Gulf to the Arabian Sea, the waterway is mere about 33 kilometers wide, yet it carries a massive share of the world’s crude oil on supertankers, making any shift in its status capable of sending shockwaves through global markets, as seen in today’s dramatic price collapse.
Iranian Foreign Minister Abbas Araghchi,
