Oil prices plummeted Friday following Iran's announcement that the Strait of Hormuz is completely open for commercial shipping. Foreign Minister Abbas Araghchi confirmed the reopening after a 10-day ceasefire between Israel and Lebanon. This development raises hopes for a broader de-escalation of the seven-week regional conflict.
Brent crude fell more than 10% during Friday trading. The international benchmark dropped below $90 per barrel. U.S. West Texas Intermediate crude fell by a similar margin. This marks the largest daily decline since the conflict began. The Strait of Hormuz handles approximately 20% of global oil supplies.
Energy sector stocks fell sharply in response to the news. Exxon Mobil and Chevron shares both fell approximately 5%. ConocoPhillips and Shell also recorded significant losses. Investors expect lower oil prices to reduce profitability and cash flow across the industry.