Global oil prices dropped sharply on Friday following confirmation by former U.S. President Donald Trump that the Strait of Hormuz has been reopened to commercial shipping, easing concerns over prolonged supply disruptions.

The development followed an earlier statement by Iran’s Foreign Minister, Seyed Abbas Araghchi, who declared that the vital maritime corridor is now “completely open” for the duration of the ongoing ceasefire involving Iran and regional actors.

“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 stated.

Responding via social media, Trump welcomed the move, while noting that U.S. naval restrictions on Iranian ports would remain pending a broader agreement.

Market Reaction

The reopening of the Strait of Hormuz, a route responsible for transporting roughly one-fifth of global oil supply, triggered an immediate sell-off in international oil markets.

Benchmark crude prices fell by about 10 per cent to approximately $86 per barrel, as traders rapidly adjusted for reduced geopolitical risk. This marks a significant reversal from earlier highs above $100 per barrel, which had been driven by fears of supply shortages after the waterway’s closure in late February.

As of the previous day, benchmark crude traded at around $96 per barrel following renewed tensions and threats of further escalation.

The latest decline is expected to provide some relief for oil-importing countries, including Nigeria, where rising global oil prices had contributed to higher domestic fuel costs.

Petrol prices in Nigeria have surged from about N760 per litre at the onset of the crisis to roughly N1,300 per litre, exacerbating cost-of-living pressures for many households.