Oil Drops, Stocks Rise As Iran Signals Strait Of Hormuz Is Open

Global markets surged Friday while oil prices tumbled, as easing tensions in the Middle East signaled a potential breakthrough in a conflict that has rattled energy supplies for weeks—an outcome President Donald J. Trump is touting as a key step toward stability.

The shift came after Iranian Foreign Minister Seyed Abbas Araghchi announced that the strategically vital Strait of Hormuz remains open to global shipping. In a social media post, Araghchi stated the waterway is “completely open,” though vessels are required to follow a “coordinated route” under Iranian oversight.

The Strait of Hormuz is one of the most critical arteries for global oil transport, and any disruption typically sends shockwaves through international markets. Traders quickly responded to the announcement as a sign of de-escalation.

U.S. crude futures for May delivery plunged 11.1% to $84.26 per barrel, while Brent crude for June dropped 10.5% to $88.95—marking one of the sharpest single-day declines in recent months. Meanwhile, equities climbed as investors interpreted the development as a step toward restoring stability.

President Trump, who has taken an assertive stance throughout the conflict, indicated late Thursday that the situation could soon be resolved. “The war in Iran… should be ending pretty soon,” he said.

On Friday, Trump thanked Iran for keeping the strait open, while making clear that U.S. pressure would continue. He confirmed that a naval blockade targeting Iranian ports remains in “FULL FORCE” until a formal agreement is reached—underscoring a strategy combining diplomatic engagement with firm deterrence.

The latest developments come amid broader regional diplomacy. Israel and Lebanon agreed to a temporary 10-day ceasefire beginning Thursday evening, following a series of Israeli strikes targeting Hezbollah positions in Lebanon—moves that had intensified fears of a wider regional conflict.

Trump also revealed plans to host Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun at the White House, describing the potential talks as a historic opportunity to ease tensions between the two nations.

The State Department has indicated that negotiations are ongoing, focusing on long-standing issues such as sovereignty, border disputes, and the role of armed groups within Lebanon. The administration has made clear it expects Lebanese authorities to confront the influence of Hezbollah as part of any lasting resolution.

Despite the market optimism, analysts warn that underlying risks remain. Experts at ING Group noted that while prices have softened on expectations of a ceasefire extension, the physical oil market continues to tighten.

“However, the physical market is becoming tighter every day that passes without a restart of oil flows through the Strait of Hormuz,” ING analysts wrote, pointing to ongoing disruptions in tanker traffic and pipeline rerouting.

According to their estimates, roughly 13 million barrels per day of supply has already been affected—a figure that could rise if restrictions persist or if diplomatic efforts falter. The analysts also cautioned that the biggest upside risk for oil prices would be a breakdown in U.S.-Iran negotiations, noting that significant gaps remain between the two sides.

For now, however, markets are responding to what appears to be a rare moment of de-escalation—one the Trump administration is positioning as proof that a firm, America-first strategy can deliver results on the global stage.