Oil prices slump further after Iran's Araghchi declares Hormuz Strait open
April 17, 2026
Oil prices drop as Iran signals Strait of Hormuz remains open, easing supply fears amid US-Iran talks, though uncertainty over war and recovery keeps markets volatile
Global oil prices fell sharply on Friday following a declaration by Iran's Foreign Minister, Abbas Araghchi, that the Strait of Hormuz is "completely open" to commercial shipping. The announcement provided immediate, if tentative, relief to energy markets that have been on edge for weeks. The price for Brent crude, the international benchmark, dropped by over 9% to settle around $90.38 per barrel, while U.S. crude saw a similar plunge. The slump follows a period of extreme volatility where prices had surged to nearly $120 a barrel.
The statement from Araghchi, made via social media, explicitly linked the reopening of the vital waterway to a fragile, U.S.-brokered ceasefire that recently took effect between Israel and Lebanon. The minister stated that passage for all commercial vessels is declared open for the duration of the ceasefire period, following a pre-announced coordinated route. This development comes after more than five weeks of severe disruption in the strait, a chokepoint for about a fifth of the world's oil supply, which began after a conflict erupted between Iran and a U.S.-Israeli coalition on February 28.
The announcement was met with a mix of cautious optimism and continued assertiveness from global powers. U.S. President Donald Trump welcomed Iran's move but affirmed that a U.S. naval blockade targeting Iranian ports and ships would remain in full effect until a comprehensive agreement with Tehran is finalized. Meanwhile, European leaders, including the heads of Britain and France who were co-chairing a summit on the crisis, hailed the reopening as a step in the right direction but called for a permanent resolution and a return to the full respect for the law of the sea. These diplomatic responses highlight the complex negotiations happening in the background to de-escalate the broader conflict.
However, the durability of the opening remains uncertain, with conflicting signals emerging from within Iran. Shortly after the foreign minister's declaration, Iran's parliamentary speaker, Mohammad Bagher Ghalibaf, warned that the strait would not stay open if the American blockade continued. He added that passage would ultimately be determined "by the field, not by social media," suggesting that Iran's military retains ultimate control and that the situation is far from resolved. This reflects the deep-seated tensions that persist despite the ceasefire in Lebanon and ongoing negotiations.
For now, the global economy is absorbing the impact of the sudden price drop. The weeks of disruption caused significant logistical backlogs, and shipping companies remain wary of the lingering risks. The conditional nature of the reopening, tied to a temporary ceasefire, means that energy markets and international stakeholders are watching the region with intense focus. The next steps depend on the longevity of the truce in Lebanon and the outcome of high-stakes negotiations aimed at preventing a return to a conflict that sent shockwaves through the global economy.
Source: business-standard