Oil prices fall sharply after Iran reopens Strait of Hormuz

LONDON: Oil prices fell sharply on Friday after Iran announced the reopening of the Strait of Hormuz, easing concerns over supply disruptions through one of the world’s most critical energy chokepoints.

Brent crude futures dropped around 8 per cent to $91 per barrel, while U.S. West Texas Intermediate (WTI) crude fell to $86 per barrel, according to market data.

The decline followed comments by Iranian Foreign Minister Abbas Araghchi that the Strait of Hormuz had been fully reopened after more than a month of restrictions linked to regional tensions.

The waterway, which handles about a fifth of global oil trade, had faced heightened uncertainty amid fears that shipping disruptions could significantly tighten global supply.

Market analysts said the announcement helped ease immediate supply risk premiums that had been factored into prices during the period of restricted access.

Oil prices had surged in recent weeks on concerns over potential escalation in the Middle East, with traders closely watching developments around shipping routes and regional ceasefire efforts.

The Strait of Hormuz is a vital passage for crude exports from key producers in the Gulf region, and any disruption typically has an immediate impact on global energy markets.