TLDR
- Tehran’s top diplomat announced the Strait of Hormuz has been fully reopened to commercial traffic throughout the ceasefire period
- Brent crude plummeted more than 10% to under $90 per barrel; WTI decreased to under $82
- Israel and Lebanon initiated a 10-day ceasefire starting Thursday at 5 p.m. ET
- Washington is exploring a potential agreement to unfreeze $20 billion in Iranian assets in exchange for enriched uranium
- President Trump verified that America’s naval blockade against Iran continues despite the waterway’s reopening
Crude oil markets experienced a significant downturn on Friday following an announcement by Iranian Foreign Minister Abbas Araghchi that the Strait of Hormuz has been completely reopened to commercial maritime traffic during the ongoing Israel-Lebanon ceasefire period.
Brent crude experienced a decline exceeding 10%, settling near $88.65 per barrel. West Texas Intermediate saw comparable losses, falling beneath $82. Both oil benchmarks had been trading above the $100 threshold earlier in the week.
The Iranian foreign minister shared the update via X, stating that transit was “completely open for all commercial vessels” following a predetermined route established by Iranian officials.
President Trump issued his own statement on Truth Social, acknowledging the waterway’s reopened status. However, he emphasized that America’s naval blockade targeting Iran “will remain in full force and effect” pending the completion of negotiations with Tehran.
This announcement generated confusion among shipping operators. Iranian state media indicated that vessels navigating the strait must coordinate their movements with Iran’s Revolutionary Guard Corps. Questions remained about the precise route that commercial ships would need to follow.
What the Ceasefire Means for Negotiations
On Thursday, Trump revealed that Israel and Lebanon had reached an agreement for a 10-day cessation of hostilities beginning at 5 p.m. ET. The president indicated he had direct conversations with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu to secure the arrangement.
Israel had maintained its military campaign in Lebanon targeting Hezbollah throughout U.S.-Iran ceasefire discussions, which had complicated broader diplomatic efforts between Washington and Tehran.
While the Lebanon ceasefire eliminated one barrier, comprehensive negotiations between the United States and Iran remain unresolved.
A Possible Deal Takes Shape
Axios disclosed Friday that American and Iranian officials are reviewing a three-page framework to resolve the ongoing conflict. A key component involves Washington unfreezing $20 billion in Iranian assets in return for Tehran surrendering its stockpile of enriched uranium.
President Trump informed journalists that both nations were “very close” to finalizing an agreement. He noted that Iran had committed to avoiding nuclear weapons development for more than two decades and had offered compromises regarding its uranium enrichment activities.
Tehran has demanded the lifting of international economic sanctions as a condition for any comprehensive settlement.
Oil prices had been declining from approximately $120 per barrel, a peak reached following the conflict’s beginning with American and Israeli military strikes on Iran in late February. Prior to hostilities, crude had been trading around $70 per barrel.
The Strait of Hormuz facilitates approximately one-fifth of global oil transportation. Energy analysts at ING calculated that roughly 13 million barrels daily were affected by the waterway’s effective shutdown.
France and Britain were scheduled to host a Friday meeting with approximately 40 nations to coordinate efforts for fully reopening the strait. Pakistan’s foreign minister confirmed Thursday that no date has been established for additional U.S.-Iran diplomatic sessions. European and Gulf state officials privately estimate that reaching a comprehensive deal could require up to six months.
