Global oil markets took a sharp hit on Friday after Iran signaled a possible easing of regional tensions by reopening the vital Strait of Hormuz to commercial vessels.
Brent crude plunged roughly 11%, settling near $88.80 per barrel after briefly dropping as low as $87.71. Meanwhile, West Texas Intermediate crude followed suit, falling more than 11% to around $83.89. Both benchmarks hit their lowest levels since March.
The sell-off came after Iran’s foreign minister confirmed that shipping through the strait would be permitted during the current ceasefire, raising optimism about improved global oil supply.
Market analysts say the move signals a potential de-escalation in the region, although uncertainty remains. Traders are now closely watching whether tanker traffic through the strategic waterway actually picks up in the coming days.
Prices were already trending downward earlier in the session amid reports of possible diplomatic progress. Talks involving the United States and Iran, along with a temporary truce between Israel and Lebanon, had fueled expectations that tensions in the region might ease.
Adding to the sentiment, Donald Trump claimed negotiations with Tehran were progressing, hinting that a potential agreement could be within reach. He suggested Iran may be open to halting nuclear weapons development for decades, though specifics remain unclear.
Despite the reopening of the strait, a U.S.-led military presence targeting Iran remains active, with thousands of personnel still deployed across the region.
While the latest developments have eased immediate supply fears, analysts warn that oil markets—particularly in Europe—could remain volatile in the short term as the geopolitical situation continues to unfold.
