Oil prices crashed and Wall Street hit record highs on Friday after Iran’s foreign minister declared the Strait of Hormuz open to commercial vessels — the most significant development in the war’s economic dimension since Iranian interdiction effectively closed the waterway nearly seven weeks ago.
Foreign Minister Abbas Araghchi posted the announcement on X early Friday, writing that passage for all commercial vessels through the strait was “completely open for the remaining period of ceasefire, on the coordinated route as already announced by Ports and Maritime Organisation of the Islamic Republic of Iran.” The phrase “coordinated route” left open the question of whether ships would be required to pay transit fees, as some vessels have reportedly done in recent weeks — a detail that European governments and shipping companies were quick to flag as unresolved.
Markets did not wait for clarification. US crude oil plunged 11.4 percent to $83.85 a barrel, its lowest level since March 10 and the second largest single-day drop since the war began. International Brent crude fell nine percent to $90.38. Heating oil futures dropped ten percent. Wholesale gasoline futures shed five percent. The moves rippled immediately into consumer price projections, with GasBuddy analyst Patrick De Haan writing that the national average gasoline price — sitting at $4.09 per gallon Friday afternoon — could fall to between $3.65 and $3.85 as soon as this weekend.
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Trump celebrated on Truth Social in all capitals: “IRAN HAS JUST ANNOUNCED THAT THE STRAIT OF IRAN IS FULLY OPEN AND READY FOR FULL PASSAGE. THANK YOU!” In a second post, however, he said the US naval blockade would “remain in full force and effect as it pertains to Iran, only, until such time as our transaction with Iran is 100% complete” — a qualification that introduced its own uncertainty about the terms under which normal commerce could resume.
Stock markets surged. The S&P 500 closed up 1.2 percent, posting a weekly gain of more than 4.5 percent and setting a new record high. The Nasdaq Composite ended up 1.5 percent for the day and 6.8 percent for the week, also closing at a record. The Dow jumped 868 points. European markets rallied in parallel, with Germany’s DAX gaining 2.2 percent, French stocks rising two percent and London’s FTSE 100 climbing nearly one percent. Treasury yields fell sharply, with the ten-year US bond yield dropping to 4.24 percent — its lowest since March 18.
European leaders meeting at a summit received the news cautiously. EU foreign policy chief Kaja Kallas welcomed the opening while immediately drawing a line on tolls. “Under international law, transit through waterways like the Strait of Hormuz must remain open and free of charge,” she wrote. “Any pay-for-passage scheme will set a dangerous precedent for global maritime routes.” French President Emmanuel Macron said securing the strait required a neutral and independent party. British Prime Minister Keir Starmer added: “The strait should be reopened immediately with no tolls and no restrictions.”
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The world’s largest shipping companies were more measured still. Maersk said it had been following security partner guidance to avoid the strait since the conflict began, and that any decision to transit would depend on risk assessments and close monitoring of conditions on the ground. Hapag-Lloyd said “there are still some open questions” and that its crisis committee was working to resolve them within 24 to 36 hours — including insurance coverage, precise corridor coordinates from Iranian military authorities and the sequencing of vessels departing the Gulf.
Those operational questions matter as much as the political announcement. Ships and their insurers need more than a social media post to send crews through a waterway where vessels have been struck, boarded and threatened for nearly two months. The infrastructure of commercial confidence — updated insurance terms, confirmed military guidance, clear corridor maps — takes days to reassemble even after the political signal has been given.
Oil prices, despite Friday’s historic drop, remain significantly elevated. US crude is still up 25 percent since the war began on February 28 and more than 45 percent since the start of the year. The relief is real. The recovery is partial. And the “coordinated route” language in Araghchi’s announcement — still unexplained as of Friday evening — will determine whether the strait reopens cleanly or becomes a new front in the dispute over Iranian sovereignty over one of the planet’s most critical commercial corridors.