Oil crashes 10%+ as Iran flips script: Hormuz 'open' after Israel-Lebanon truce

Oil futures tanked on Friday following a statement by Iran Foreign Minister Abbas Araghchi, reflecting trader relief that the immediate risk of a supply shock had receded.

The move marks a notable de-escalation by Tehran.

Brent crude fell (down 11.26% to $84.03 as of 9.50 Beijing time); US West Texas Intermediate (WTI) futures down 10.45% to $89 late on Friday as traders anticipated a potential return of supply.

The announcement eased fears of a prolonged shutdown triggered by conflict.

Iranian Foreign Minister Abbas Araghchi said the strait — a narrow chokepoint through which roughly one-fifth of the world’s crude and liquefied natural gas typically flows — will remain open for all commercial vessels under routes coordinated by Iran’s maritime authorities for the duration of a 10-day cease-fire between Israel and Hezbollah.

The declaration was made public about 1:25 pm GMT Friday (4.25pm Gulf Standard Time | 9.25pm Tokyo).

By tying the reopening explicitly to the Israel-Lebanon ceasefire, Iranian officials framed the decision as responsible stewardship rather than capitulation.

Araghchi, a veteran diplomat who helped negotiate the 2015 Iran nuclear deal, has emerged as the public face of Tehran’s current foreign policy.

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.

— Seyed Abbas Araghchi (@araghchi) April 17, 2026

'Peace through strength'

His statement was quickly amplified by Iranian state media and pro-Iranian accounts online, many of which portrayed the reopening as proof of Iran’s strategic influence and commitment to “peace through strength.”

International reaction was muted but watchful.

Shipping companies and energy traders said they were monitoring compliance with the announced route.

The Hormuz Strait, which connects the Arabian Gulf to the Gulf of Oman, is only about 21 miles wide at its narrowest point. Roughly 20 million barrels of oil pass through it daily, making it one of the most strategically sensitive waterways on the planet.

US officials had no immediate comment, though the Trump administration had previously warned against any Iranian attempt to close the strait.

Hormuz open again

For now, the waterway that had loomed as a flashpoint is open again — at least for the duration of a fragile truce half a world away.

Global oil markets were roiled after Hormuz was declared “completely open” to commercial shipping during a cease-fire in the Middle East, even as vessel traffic remains far below normal levels and geopolitical risks.

Despite Iran’s statement, maritime sources and Red Sea traffic posts indicate that actual vessel movements are still well below pre-conflict norms.

Early reports suggesting only a handful of tankers and merchant ships have moved through the strait this week — though numbers are increasing compared with the near-paralysis seen during the height of hostilities.

Tanker squeeze

The reopening comes weeks after Tehran effectively closed the waterway in response to escalating tensions with the United States and Israel, and just days after Washington imposed a naval blockade of Iranian ports.

The closure had significantly disrupted global energy exports, spiking price volatility.

While Friday’s declaration and market reaction suggest traders are pricing in some easing of supply constraints, analysts caution that full normalisation of transit will depend on the durability of the cease-fire and continued diplomatic progress.

Meanwhile, the ceasefire in Lebanon remains fragile, but is reportedly "holding".

Israeli forces and Hezbollah have accused each other of violations in the hours since the truce began, raising questions about how long the Hormuz opening will last.

A prolonged Hormuz closure or restrictions would have sent oil prices soaring and threatened energy security for Asia, Europe and the United States.