LONDON: Oil prices declined sharply on Friday after Iran announced the reopening of the Strait of Hormuz, easing concerns about potential supply disruptions through one of the world’s most important energy choke points.
Brent crude futures dropped by around 8 per cent to $91 per barrel, while U.S. West Texas Intermediate (WTI) crude fell to $86 per barrel, according to market data.
The fall in prices came after Iranian Foreign Minister Abbas Araghchi stated that the Strait of Hormuz had been fully reopened following more than a month of restrictions linked to regional tensions.
The waterway, which accounts for roughly one-fifth of global oil trade, had been under significant uncertainty amid fears that shipping disruptions could sharply tighten global supply.
Market analysts said the reopening helped reduce immediate supply risk premiums that had been built into prices during the period of restricted access.
Oil prices had surged in recent weeks due to concerns over possible escalation in the Middle East, with traders closely monitoring developments related to shipping routes and regional ceasefire efforts.
The Strait of Hormuz remains a crucial route for crude exports from major Gulf producers, and any disruption to its flow typically has an immediate effect on global energy markets.