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Oil prices plunged nearly 13% on Friday after Iran announced the full reopening of the Strait of Hormuz, easing fears of supply disruptions in one of the world’s most critical energy corridors.
Market Reaction
– U.S. crude dropped to $81.37 per barrel, down from $93.18 at the previous settlement.
– Prices swung sharply during the session, hitting an intraday high of $90.34 before sliding to a low of $78.97.
– Analysts attribute the decline to traders unwinding geopolitical risk premiums built up over recent weeks.
Geopolitical Context
The Strait of Hormuz has been at the center of escalating tensions, with concerns that restricted access could choke global oil supplies.
– Iranian Foreign Minister Abbas Araghchi confirmed the waterway is now fully open to commercial shipping during the ceasefire period.
– He emphasized that the move supports regional de‑escalation and ensures uninterrupted maritime navigation.
– The announcement followed earlier U.S. threats of a naval blockade after Iran imposed restrictions amid heightened tensions following joint U.S.-Israeli strikes in February.
Market Implications
– The reopening triggered a swift repricing across energy markets, with volatility reflecting reduced fears of immediate supply shocks.
– Traders are closely monitoring the two‑week ceasefire, set to expire on April 22, for signals of future stability or renewed disruption.
– Washington has yet to issue an official response to Iran’s announcement.
Key Takeaway
The sharp drop in oil prices underscores how sensitive global energy markets remain to geopolitical developments in the Strait of Hormuz. While the reopening has eased immediate concerns, uncertainty persists as the ceasefire deadline approaches.
