Oil prices plunged by about 10% on Friday after Strait of Hormuz was declared “completely open” by Iran, alongside a ceasefire between Israel and Lebanon. The development eased fears of a prolonged disruption to one of the world’s most critical oil transit routes, immediately cooling energy markets that had been on edge for weeks.


Both U.S. and international oil benchmarks fell sharply. West Texas Intermediate and Brent Crude recorded steep declines as traders reacted to the restored maritime access. The earlier risk premium, driven by limited tanker movement through Hormuz, had pushed crude prices close to $120 at the height of tensions after the conflict escalated on February 28.


The drop in crude translated quickly to consumer relief in the United States. According to data from American Automobile Association, the national average gasoline price fell to $4.08 per gallon. Analysts note that roughly 51% of pump prices are directly tied to crude oil costs, amplifying the effect of the market correction.


In a post on X, Iranian Foreign Minister Seyed Abbas Araghchi stated that all commercial vessels were free to pass through the strait during the ceasefire period. Meanwhile, former U.S. President Donald Trump, speaking to CBS News, said a broader agreement with Tehran was “close,” though Iran maintained that transferring uranium to the United States was “not an option.”


Military data underscored how severe the disruption had been. The United States Central Command reported that 19 vessels had turned back due to naval blockades during the peak of the crisis. With de-escalation now in sight, financial markets rallied on optimism that the Middle East conflict may be nearing an end. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all posted gains as investors welcomed the easing geopolitical risk.