Global oil prices tumbled sharply on Friday after Iran signalled a potential easing of tensions by reopening the Strait of Hormuz to commercial shipping.
Brent crude dropped by about 11%, falling to around $88.80 per barrel after earlier hitting a low of $87.71. U.S. West Texas Intermediate crude followed a similar trend, sliding more than 11% to roughly $83.89 per barrel. Both benchmarks sank to their lowest levels since March.
The sharp decline came after Iran’s foreign minister confirmed that commercial vessels would be allowed to pass through the strait for the duration of the ongoing ceasefire, raising hopes of improved oil supply.
Analysts say the development points to a broader de-escalation in the region at least for now. However, they caution that markets will be watching closely to see whether tanker traffic through the strait actually increases in the coming days.
Prices had already been under pressure earlier in the session, as signs of possible talks between United States and Iran, alongside a 10-day truce between Israel and Lebanon, boosted expectations that the conflict could cool.
Meanwhile, Donald Trump said negotiations with Tehran were making progress, suggesting a deal could be within reach. According to him, Iran has indicated a willingness to refrain from developing nuclear weapons for more than two decades—though details remain unclear.
Despite the reopening of the strait, a U.S.-led military blockade targeting Iran is still in place, with thousands of personnel deployed in the region.
While the latest developments have eased immediate supply concerns, analysts warn that the oil market particularly in Europe could remain tight in the short term as the situation continues to evolve.
