Oil prices slump to $86 as Strait of Hormuz fully reopens

Global oil prices fell sharply on Friday, dropping by about 10 per cent after U.S. President Donald Trump confirmed that the strategic Strait of Hormuz has been reopened to commercial shipping, calming concerns over extended supply disruptions.

The development came after Iran’s Foreign Minister Abbas Araghchi announced that the crucial shipping lane is now fully accessible for the duration of the ceasefire involving Iran and its regional rivals.

“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.

Trump, in a response posted on Truth Social, welcomed the move and confirmed the reopening, while noting that U.S. naval restrictions on Iranian ports would remain until a wider agreement is achieved.

The reopening of the Strait of Hormuz—a channel responsible for transporting nearly one-fifth of the world’s daily oil supply—prompted an immediate sell-off in global oil markets. Benchmark crude prices dropped to about $86 per barrel as traders quickly removed the geopolitical risk premium that had built up during weeks of heightened tensions.

This drop represents a significant turnaround from earlier surges that pushed prices above $100 per barrel, fuelled by fears of supply shortages after the waterway was shut in late February.

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Just a day earlier, benchmark crude stood at $96 per barrel following renewed threats by Trump to resume air strikes on Iran.

The latest price decline is expected to bring some relief, particularly for Nigerians who have faced rising fuel costs since the conflict began.

From about N760 per litre at the onset of the crisis, petrol prices have climbed to roughly N1,300, further straining living conditions across the country.