Following Iran’s announcement that the Strait of Hormuz will be “completely open” to commercial ships for the duration of the ceasefire in the US-Israeli war, oil prices fell. Following the revelation, the price of a barrel of Brent crude dropped from above $98 to $88.
A fifth of the world’s oil and liquified natural gas are normally transported via the Strait of Hormuz, a narrow stretch of water south of Iran. Although Iran’s announcement was hailed by US President Donald Trump, maritime organizations are still confirming it.
“The passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire,” stated Iranian Foreign Minister Abbas Araghchi. The announcement sparked a global market rally, with the major US stock indices gaining in early trading. The Nasdaq and Dow Jones Industrial Average (DJIA) increased by 1.3% and 1.9%, respectively, while the S&P 500 increased by 1.2%.
In response to the news, shares in Europe also increased. London’s FTSE 100 finished the day up about 0.7%, while the Cac index in Paris and the Dax index in Frankfurt both closed about 2% higher. Since the US and Israel began military assaults in Iran in late February, the government has effectively closed the Strait of Hormuz.
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