Oil prices tumble as Iran says Strait of Hormuz 'completely open'

17th Apr 2026 14:34

(Sharecast News) - Oil prices tumbled on Friday after Iran said the Strait of Hormuz is now "completely open" to commercial ships.

The country's foreign minister, Abbas Araghchi, said in a social media post: "In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire."

However, he said vessels must transit through a "coordinated route" announced by Iran's maritime authorities.

In a post on Truth Social, US president Donald Trump thanked Iran. "The Strait of Hormuz is completely open and ready for business and full passage, but the naval blockade will remain in full force and effect as it pertains to Iran, only, until such time as our transaction with Iran is 100% complete," he said.

"This process should go very quickly in that most of the points are already negotiated."

Oil prices crashed and at 1440 BST, Brent crude was down 10.2% at $89.22 a barrel. Stock markets shot higher, meanwhile, with the benchmark Stoxx 600 index up 1.3%, while the FTSE 100 - which is heavily weighted towards oil stocks - saw more modest gains of 0.5%. It was also held back by weakness in utilities after Chancellor Rachel Reeves said that her and energy secretary Ed Miliband were looking at ways to break the link between electricity and gas prices.

Airlines were among the biggest beneficiaries, with easyJet up 6.7%, BA and Iberia owner IAG 5% higher, Wizz Air up 9% and Deutsche Lufthansa ahead 5.9%. Engine maker Rolls-Royce also racked up strong gains, up 5.3%.

Kathleen Brooks, research director at XTB, said: "This is the biggest development so far during the ceasefire, and it gives hope that the war will end soon, and supply chains will return to some normality. While it will take some time to relieve the back log of tankers travelling through the Strait of Hormuz, and for Gulf commodity supplies to return to normal after damage caused by Iranian drones, this is undoubtedly good news, and it brightens the outlook for the global economy for the rest of this year.

"The Iranians have also spelled out what it will take to keep the Strait open: no further attacks on Lebanon. This is the line in the sand for now, and no doubt the international community will focus its attention on ensuring Israel does indeed hold to the terms of the ceasefire and efforts are made to extend it beyond 10 days. Added to this, the US still needs to agree terms of a prolonged peace deal with Iran, but for now, the market is euphoric about the current situation."

She added: "Of course there are risks that could see the Strait close once more, but we think now that Iran has reopened the Strait then the chance of them closing it again is minimal, as they also need their oil to flow through the Strait to boost revenues.

"The good news continues to build, which is providing a sense of upward momentum for risky assets as we end the week. For stock and bond market bulls around the world, this is the perfect end to the week."