Global oil prices dropped sharply after Iran said the Strait of Hormuz is “completely open,” easing fears of supply disruptions along one of the world’s most critical energy chokepoints. The move calmed markets that had been pricing in heightened geopolitical risk and the possibility of restricted tanker traffic.
Brent crude and U.S. West Texas Intermediate (WTI) both slid by more than 10% in volatile trading as traders unwound risk premiums built up during the recent Middle East tensions. The pullback in crude helped lift broader financial markets, with U.S. stocks surging and the Dow jumping roughly 1,000 points as cheaper energy improved the outlook for consumer spending and corporate costs.
The Strait of Hormuz handles a significant share of global seaborne oil flows, so any sign of smoother passage can quickly ripple through fuel prices, inflation expectations, and global equities. Analysts say markets will now watch for confirmation of sustained shipping stability and whether the current truce holds, as renewed disruptions could rapidly reverse the decline in crude.
