Global oil prices fell sharply Friday and U.S. stock markets surged to record highs after Iran signaled that the Strait of Hormuz would be reopened to commercial shipping.
U.S. crude dropped 11.4% to $83.85 per barrel, its lowest level since March 10, while Brent crude declined 9% to $90.38. The declines marked one of the steepest single-day drops since the conflict began. Fuel-related markets followed suit, with heating oil futures falling 10% and wholesale gasoline prices down 5%.
Iranian Foreign Minister Abbas Araghchi announced that commercial vessels would be allowed to pass through the strait during the remaining ceasefire period, though he referenced a “coordinated route,” leaving uncertainty about potential restrictions or fees.
The announcement was welcomed by U.S. President Donald Trump, who said the waterway was “fully open and ready for full passage.” However, he clarified that a U.S. naval blockade targeting Iran would remain in place until broader negotiations are completed.
Energy analysts said the drop in oil prices could translate quickly into lower gasoline costs. U.S. gas prices, which averaged $4.09 per gallon Friday, have already been trending downward and could fall further in the coming days.
Despite the sharp decline, oil prices remain elevated overall, rising significantly since the start of the conflict.
Financial markets responded positively. The S&P 500 rose 1.2% to close at a record high, while the Nasdaq Composite gained 1.5%, also reaching a new peak. The Dow Jones Industrial Average climbed 868 points, and the Russell 2000 index advanced 2.1%. All three major indexes posted their third consecutive week of gains.
U.S. Treasury yields also fell, with the 10-year yield dropping to 4.24%, its lowest level in over a month.
European markets rallied as well. The Stoxx 600 index rose 1.4%, Germany’s DAX gained 2.2%, France’s CAC 40 increased 2%, and the U.K.’s FTSE 100 climbed nearly 1%.
European leaders cautiously welcomed the reopening but emphasized the importance of unrestricted access. European Union foreign policy chief Kaja Kallas warned that any toll system for passage could set a dangerous precedent for global shipping. French President Emmanuel Macron and U.K. Prime Minister Keir Starmer also supported reopening the strait without restrictions.
Major shipping companies responded with caution. Operators said they would continue to assess security risks before resuming transit, citing lingering uncertainties around safety, insurance, and navigation protocols in the region.
