Oil prices plunge as Iran says Strait 'open'
Summary
Oil prices dropped sharply after Iran said the Strait of Hormuz would be fully open to commercial ships for the rest of a ceasefire period. This announcement followed a ceasefire deal between Israel and Lebanon and led to gains in global stock markets.Key Facts
- Iran declared the Strait of Hormuz open for all commercial ships during the ceasefire.
- Brent crude oil prices fell from above $98 to about $88 per barrel.
- The Strait of Hormuz is a crucial route where about one-fifth of the world’s oil and liquified natural gas pass.
- Iran had effectively closed the Strait following US and Israeli military strikes in February.
- Before the conflict, Brent crude was under $70 per barrel but rose above $100 and peaked at $119 in March.
- The closure caused fuel prices to rise and raised concerns about jet fuel and fertilizer supplies.
- Fertilizer supply disruption risks higher food prices as one-third of key fertilizer chemicals go through the Strait.
- President Donald Trump welcomed the opening but said a naval blockade on Iran would continue until a permanent peace deal is reached.
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