Blitz Bureau
NEW DELHI: Global oil prices plunged sharply after Iran announced that the Strait of Hormuz was completely open to commercial shipping during a ceasefire period, easing fears of prolonged supply disruption in one of the world’s most critical energy corridors. According to The Wall Street Journal, oil prices plunged around 10 per cent after Iran’s Foreign Minister said the strait was open following a ceasefire between Israel and Lebanon.
The sharp drop reflected market optimism that tensions around the Persian Gulf could ease, even as uncertainties remained over the durability of the ceasefire and the scope of the reopening.
Separately, CNN reported that Brent crude, the global benchmark, fell about 10 per cent to around $89 per barrel, while West Texas Intermediate (WTI), the US benchmark, dropped more than 10 per cent to roughly $81.50 per barrel. The declines pushed oil prices to their lowest levels in several weeks, according to the data presented in a price chart on page 4 of the CNN report, which tracks the sharp fall following the announcement.
Markets also reacted positively beyond energy. CNN said US stocks rallied, with the Dow rising 640 points, or 1.2 per cent, while the S&P 500 and Nasdaq also gained.
The trigger for the sell-off in oil came after Iran’s Foreign Minister Abbas Araghchi declared that “the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire.”
Traders interpreted the move as a potential easing of supply constraints that had driven prices higher since the conflict escalated.
