Oil prices plunged more than 10 percent on Friday, extending earlier losses, following an announcement by Iran's Foreign Minister that the Strait of Hormuz remains open to all commercial vessels during the current ceasefire period, mirroring the ceasefire in Lebanon.
Brent crude oil futures LCOc1 fell $11.12, or 11.2%, to $88.27 a barrel by 1311 GMT. US West Texas Intermediate CLc1 crude oil futures fell $11.40, or 12%, to $83.29 a barrel.
The drop in prices came after Iranian Foreign Minister Abbas Araghchi wrote in
US President Donald Trump confirmed the news with his own post on Truth Social, writing: “Iran just announced that the Iran Strait is completely open and ready for full passage! Thank you!”
UBS analyst Giovanni Staunovo said: “The Iranian Foreign Minister's comments indicate a reduction in tension as long as the ceasefire holds; now we also have to see if the number of oil tankers crossing the Strait increases substantially.”
The market had already seen prices fall earlier in the day amid speculation of new talks between the United States and Iran over the weekend, along with a 10-day ceasefire between Lebanon and Israel, fueling investor optimism that the broader Middle East conflict could be coming to an end.
Adding to the diplomatic push, Donald Trump claimed that Tehran had offered not to possess nuclear weapons for more than 20 years, addressing an important point in ongoing discussions.
“We're going to see what happens. But I think we're very close to a deal with Iran,” Trump told reporters outside the White House on Thursday.
