Crude oil prices slumped by around 10% after Iran declared that the Strait of Hormuz was "completely open" for all commercial vehicles, till the end of ceasefire with the United States.
Brent, the global crude benchmark, was down by 10.73% to $88.73 an ounce. The US West Taxes Intermediate futures plunged by 10.82% to $84.44.
This marks the sharpest reversal in crude oil prices in the past six weeks, as prices stayed elevated during the escalating conflict in the Middle East.
The Strait of Hormuz, which accounts for 20% of world's crude and gas supplies, was closed down by Iran in response to the offensive launched by the US and Israel on Feb. 28.
Till earlier this week, analysts warned that oil may peak to $150 an ounce if the conflict persists, as Tehran had indicated that its ally, the Houthi rebels of Yemen, will choke off supplies via Bab al-Mandab Strait in the Red Sea.
The slump in oil prices came minutes after Iranian Foreign Minister Abbas Araghchi took to social media to confirm that Hormuz will be opening up after weeks of closure. He, however, said the opening of the vital waterway will last till the ceasefire stays between Washington and Tehran.
ALSO READ: S&P 500, Nasdaq Rally As Iran Opens Hormuz; Dow Soars 600 Points
"In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire, on the coordinated route as already announced by Ports and Maritime Organisation of the Islamic Rep. of Iran," he posted on X.
The current truce is scheduled to expire on April 21, but both sides are widely expected to extend the ceasefire.
Meanwhile, US President Donald Trump also took to his Truth Social handle and said, "Iran has just announced that the Strait of Iran is fully open and ready for full passage."
According to multiple media reports, Trump thanked Iran for opening the strait in a social media post.
Posting on Truth Social, Trump said the Strait of Hormuz remains “completely open” for commercial shipping, even as the US naval blockade targeting Iran stays in place.
“The Strait of Hormuz is completely open and ready for business and full passage, but the naval blockade will remain in full force and effect as it pertains to Iran only, until such time as our transaction with Iran is 100% complete,” Trump wrote.
ALSO READ: Hormuz Open, But US Naval Blockade To Remain In Full Force: Trump After Iran's Announcement
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