TEHRAN: Global oil prices fell significantly after Iran announced that the Strait of Hormuz would remain “fully open” to commercial shipping for the duration of the ceasefire in the conflict involving the US and Israel.
Following the statement, the price of Brent crude dropped to around $88 per barrel, down from over $98 earlier in the day. The Strait of Hormuz, located south of Iran, is a critical maritime route through which roughly one-fifth of the world’s oil and liquefied natural gas supplies pass.
US President Donald Trump welcomed the announcement, although maritime authorities are still working to confirm conditions on the ground. Iranian Foreign Minister Abbas Araghchi stated that commercial vessels would be allowed safe passage through the strait throughout the ceasefire period.
Financial markets reacted positively, with the S&P 500 rising 1.2 percent, while major European indices in Paris and Frankfurt gained about 2 percent. London’s FTSE 100 also closed higher.
The waterway had been largely restricted since US and Israeli strikes on Iran earlier this year, severely limiting tanker traffic and pushing oil prices upward. Before the conflict, Brent crude traded below $70 per barrel, later surging past $100 and peaking above $119 in March. Prices showed some recovery later Friday, climbing back to around $92 per barrel.
(Inputs from BBC)
Comment