The reopening of the Strait of Hormuz triggered sharp fluctuations in oil prices: a drop of over 11%.
2026-04-18 01:55:04
On Friday (April 17), Iranian Foreign Minister Abbas Araghchi officially announced on the social media platform X that, in accordance with the 10-day ceasefire agreement recently reached between Lebanon and Israel, the Strait of Hormuz is "fully open" to all commercial vessels and will remain so for the remainder of the ceasefire. This strategic waterway carries approximately one-fifth of the world's oil shipments, and its reopening quickly dispelled market concerns about a long-term disruption to Middle Eastern oil supplies, triggering a sharp drop in international oil prices. Brent crude and WTI crude futures both recorded single-day declines of approximately 11%-13%, marking the largest single-day drop since April, signifying a rapid and significant fading of the high premiums previously accumulated due to regional conflict risks.
As of 12:39 PM Eastern Time (00:39 Beijing Time), Brent crude futures fell approximately 10.5%-13%, settling in the $86-$89 range per barrel, having touched a low below $86 during the session; West Texas Intermediate (WTI) crude futures fell approximately 11%-14%, settling in the $80-$83 range per barrel, having briefly fallen to around $80.56 during the session. Both major crude oil contracts saw prices fall to their lowest levels since March, with trading volume significantly increasing. The market had previously driven up risk premiums due to the potential closure of the Strait of Hormuz, but with the news of its reopening, these premiums quickly receded, and oil prices began to return to a normal pricing trajectory based on actual crude oil flows, global supply and demand fundamentals, and inventory levels.
Iran and Trump's statements
Iranian Foreign Minister Araqchi stated explicitly: "In accordance with the Lebanese ceasefire agreement, the passage of all commercial vessels through the Strait of Hormuz has been declared fully open until the end of the ceasefire period. Vessels will pass safely along the coordinated routes previously announced by the Iranian Ports and Maritime Organization." This statement is seen as an important gesture by Iran amid easing regional tensions, aimed at demonstrating its willingness to abide by the ceasefire agreement.
US President Trump subsequently responded positively on Truth Social, stating, "Iran just announced that the Strait of Hormuz is fully open and ready for full passage. Thank you!" He further emphasized that Iran had agreed to "never close the Strait of Hormuz again," and said this commitment would no longer be used as a weapon against the world. Trump also revealed that significant progress had been made in US-Iran negotiations, with Iran promising not to develop nuclear weapons for a long period (more than 20 years) and willing to return nuclear materials. Further talks between the two sides were possible over the weekend. He also took a tougher stance against Israel, announcing a ban on further Israeli bombing of Lebanon. Despite Iran's announcement of the strait's opening, Trump explicitly emphasized that the US Navy's military blockade of relevant Iranian ships and ports would remain "fully effective" until a final comprehensive agreement was reached with Iran. The blockade currently involves more than 10,000 personnel. A US official confirmed to the media that the blockade would not be lifted immediately following the opening announcement. Trump stated that "most of the key points of the negotiations have been finalized," the process would be "completed soon," and that the US would receive Iran's nuclear materials in the agreement, while Iran would not receive any unfreezing funds. Currently, the US and Iran are in in-depth consultations on a three-page memorandum of understanding aimed at ending the conflict. The core issues cover sensitive topics such as strict restrictions on Iran's nuclear program, the long-term nature of the regional ceasefire mechanism, and the gradual lifting of sanctions.
Analyst opinions and market impact
Analysts from multiple energy agencies pointed out that the recent plunge in oil prices was mainly due to the rapid decline in the risk premium associated with the Middle East conflict.
Gelber & Associates and other firms say crude oil prices are shifting from "disruption risk pricing" to normal flow pricing.
SEB Research analyst Ole Hvalbye believes that the opening of the Straits is a positive step in the right direction, but the European market will remain tense for some time because the journey from the Persian Gulf region to major oil ports such as Rotterdam takes about 21 days, and the full recovery of the supply chain will require a buffer period.
PVM Oil Advisors analyst Tamas Varga warned that if the Iran nuclear deal and the lifting of sanctions are not resolved in a timely manner, traffic across the Strait could face disruption again.
Boosted by a sharp drop in oil prices and a significant improvement in geopolitical risk sentiment, the U.S. stock market surged, with major indices such as the Dow Jones Industrial Average soaring by more than 900-1,000 points to hit recent highs, reflecting investors' optimistic expectations for easing regional tensions and a recovery in global energy supplies.
Potential Risks and Future Outlook: While short-term concerns about oil supply have eased significantly, analysts warn that geopolitical uncertainty remains high. If a final agreement between the US and Iran fails to be reached, or if the 10-day ceasefire in Lebanon is not effectively maintained, traffic across the Straits could be disrupted again. The tensions facing the European energy market are unlikely to dissipate completely in the short term, and the future trend of global oil prices will depend closely on the latest developments in US-Iran negotiations, the actual implementation of the regional ceasefire agreement, and the degree of compromise among the parties on the nuclear issue. Overall, this event has provided an important window for de-escalation of the Middle East conflict, but achieving long-term stability still depends on whether the parties can reach a sustainable and comprehensive agreement to prevent any unexpected factors from further increasing market volatility.
As of 12:39 PM Eastern Time (00:39 Beijing Time), Brent crude futures fell approximately 10.5%-13%, settling in the $86-$89 range per barrel, having touched a low below $86 during the session; West Texas Intermediate (WTI) crude futures fell approximately 11%-14%, settling in the $80-$83 range per barrel, having briefly fallen to around $80.56 during the session. Both major crude oil contracts saw prices fall to their lowest levels since March, with trading volume significantly increasing. The market had previously driven up risk premiums due to the potential closure of the Strait of Hormuz, but with the news of its reopening, these premiums quickly receded, and oil prices began to return to a normal pricing trajectory based on actual crude oil flows, global supply and demand fundamentals, and inventory levels.
Iran and Trump's statements
Iranian Foreign Minister Araqchi stated explicitly: "In accordance with the Lebanese ceasefire agreement, the passage of all commercial vessels through the Strait of Hormuz has been declared fully open until the end of the ceasefire period. Vessels will pass safely along the coordinated routes previously announced by the Iranian Ports and Maritime Organization." This statement is seen as an important gesture by Iran amid easing regional tensions, aimed at demonstrating its willingness to abide by the ceasefire agreement.
US President Trump subsequently responded positively on Truth Social, stating, "Iran just announced that the Strait of Hormuz is fully open and ready for full passage. Thank you!" He further emphasized that Iran had agreed to "never close the Strait of Hormuz again," and said this commitment would no longer be used as a weapon against the world. Trump also revealed that significant progress had been made in US-Iran negotiations, with Iran promising not to develop nuclear weapons for a long period (more than 20 years) and willing to return nuclear materials. Further talks between the two sides were possible over the weekend. He also took a tougher stance against Israel, announcing a ban on further Israeli bombing of Lebanon. Despite Iran's announcement of the strait's opening, Trump explicitly emphasized that the US Navy's military blockade of relevant Iranian ships and ports would remain "fully effective" until a final comprehensive agreement was reached with Iran. The blockade currently involves more than 10,000 personnel. A US official confirmed to the media that the blockade would not be lifted immediately following the opening announcement. Trump stated that "most of the key points of the negotiations have been finalized," the process would be "completed soon," and that the US would receive Iran's nuclear materials in the agreement, while Iran would not receive any unfreezing funds. Currently, the US and Iran are in in-depth consultations on a three-page memorandum of understanding aimed at ending the conflict. The core issues cover sensitive topics such as strict restrictions on Iran's nuclear program, the long-term nature of the regional ceasefire mechanism, and the gradual lifting of sanctions.
Analyst opinions and market impact
Analysts from multiple energy agencies pointed out that the recent plunge in oil prices was mainly due to the rapid decline in the risk premium associated with the Middle East conflict.
Gelber & Associates and other firms say crude oil prices are shifting from "disruption risk pricing" to normal flow pricing.
SEB Research analyst Ole Hvalbye believes that the opening of the Straits is a positive step in the right direction, but the European market will remain tense for some time because the journey from the Persian Gulf region to major oil ports such as Rotterdam takes about 21 days, and the full recovery of the supply chain will require a buffer period.
PVM Oil Advisors analyst Tamas Varga warned that if the Iran nuclear deal and the lifting of sanctions are not resolved in a timely manner, traffic across the Strait could face disruption again.
Boosted by a sharp drop in oil prices and a significant improvement in geopolitical risk sentiment, the U.S. stock market surged, with major indices such as the Dow Jones Industrial Average soaring by more than 900-1,000 points to hit recent highs, reflecting investors' optimistic expectations for easing regional tensions and a recovery in global energy supplies.
Potential Risks and Future Outlook: While short-term concerns about oil supply have eased significantly, analysts warn that geopolitical uncertainty remains high. If a final agreement between the US and Iran fails to be reached, or if the 10-day ceasefire in Lebanon is not effectively maintained, traffic across the Straits could be disrupted again. The tensions facing the European energy market are unlikely to dissipate completely in the short term, and the future trend of global oil prices will depend closely on the latest developments in US-Iran negotiations, the actual implementation of the regional ceasefire agreement, and the degree of compromise among the parties on the nuclear issue. Overall, this event has provided an important window for de-escalation of the Middle East conflict, but achieving long-term stability still depends on whether the parties can reach a sustainable and comprehensive agreement to prevent any unexpected factors from further increasing market volatility.
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