Oil Prices Slide To $86 As Strait Of Hormuz Reopens
Global oil prices dropped by approximately 10 per cent following confirmation that the Strait of Hormuz has reopened to commercial shipping, alleviating concerns regarding prolonged supply disruptions. This announcement, reported by outlets including Euronews and the BBC , followed a statement from Iran’s Foreign Minister indicating the maritime corridor is "completely open" during the current ceasefire.
The development, which prompted a positive response from U.S. President Donald Trump, is seen as a key step in easing regional tensions. The reopened route aims to stabilize energy markets while diplomatic efforts toward a broader peace agreement continue, according to reports in Al Jazeera and via Instagram .
“In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open… on the coordinated route as already announced,” Araghchi said in a post on X.
In a post on Truth Social, President Trump welcomed the reopening of the Strait of Hormuz while clarifying that U.S. naval restrictions on Iranian ports will persist until a more comprehensive agreement is finalized.
The reopening of the Strait of Hormuz —a critical chokepoint through which roughly 20% of the world's daily oil supply passes—has triggered an immediate sell-off in energy markets. Benchmark crude prices slumped toward $86 per barrel as traders quickly shed the geopolitical risk premium that had inflated prices during weeks of escalating regional tensions.
This downturn represents a dramatic reversal from recent price spikes that saw crude soar above $100 per barrel following the waterway's closure in late February. Market volatility was recently exacerbated by statements from the U.S. executive branch regarding potential strikes on Iranian infrastructure, which had kept the global supply outlook under significant strain.
Only yesterday, benchmark crude was trading at approximately $96 per barrel, reflecting the high stakes of the ongoing conflict. However, reports from social media updates suggest that the announcement of a ceasefire and the subsequent reopening of the Strait have provided the first real signs of a cooling market after weeks of record-breaking jumps.
The development is being met with significant relief in Nigeria, where citizens have struggled with a sharp increase in the cost of living since the conflict began. As an import-dependent economy for refined fuels, Nigeria remains highly vulnerable to global price fluctuations, and the prospect of lower crude costs offers a potential reprieve for domestic energy markets.
Local fuel prices in Nigeria have climbed from roughly N760 at the war's onset to as high as N1,300 per litre in some regions. This surge has heavily burdened households and businesses, but analysts hope that the stabilization of the Strait of Hormuz will eventually lead to a reduction in pump prices and ease the current economic strain on Nigerians.