Global oil prices plunged by about 10 per cent on Friday after U.S. President Donald Trump confirmed that the strategic Strait of Hormuz has been reopened to commercial shipping, easing fears of prolonged supply disruptions.
The announcement followed a statement by Iran’s Foreign Minister Abbas Araghchi, who declared that the vital maritime corridor is now “completely open” for the duration of the ongoing ceasefire between Iran and its regional adversaries.
“In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open… on the coordinated route as already announced,” Araghchi said in a post on X.
Trump, responding on Truth Social, welcomed the development, confirming the reopening in a brief post before clarifying that U.S. naval restrictions on Iranian ports would remain in place until a broader agreement is reached.
Market reaction
The reopening of the Strait of Hormuz—through which roughly one-fifth of global oil supply flows daily—triggered an immediate sell-off in oil markets. Benchmark crude prices dropped to around $86 per barrel, as traders rapidly priced out the geopolitical risk premium that had built up during weeks of escalating tensions.
The decline marks a sharp reversal from earlier price spikes above $100 per barrel, driven by fears of supply shortages following the closure of the waterway in late February.
As of yesterday, the Benchmark crude was priced at $96 per barrel after Trump earlier threatened resumption of air strike on Iran.
However the current development is seen as a relief especially to Nigerians who have endured rising fuel prices since the war started.
From N760 when the war started, a litre of fuel is now sold at about N1,300 worsening the standard of living of Nigerians.
(Daily Trust)
