Oil Prices Plummet 10% as Strait of Hormuz Opens for Commercial Vessels
Oil prices plummeted by over 10% on Friday after Iran's foreign minister declared that the Strait of Hormuz was open for commercial vessels to pass through during the remaining ceasefire period. This announcement led to a significant drop in Brent crude futures, which fell $11.12, or 11.2%, to $88.27 a barrel at 1311 GMT.
US West Texas Intermediate crude futures also declined, dropping by $11.40, or 12%, to $83.29 a barrel. The decline in oil prices was expected as investors had already been optimistic about the possibility of further talks between the US and Iran over the weekend and a 10-day ceasefire between Lebanon and Israel.
UBS analyst Giovanni Staunovo noted that comments from Iran's foreign minister indicate a de-escalation, but emphasized that it is crucial to see if the number of tankers crossing the Strait increases substantially. This development comes after President Trump stated that Tehran had offered not to possess nuclear weapons for more than 20 years.