Washington, April 17 (NationPress) Oil prices experienced a drastic decline on Friday after Iran proclaimed that the Strait of Hormuz is now “entirely open” for commercial shipping amidst a ceasefire, alleviating concerns about potential long-term supply interruptions in this vital energy corridor.

As reported by 'The Wall Street Journal', oil prices “dropped nearly 10 percent” following statements from Iran’s Foreign Minister regarding the strait's reopening after a ceasefire between Israel and Lebanon.

This significant decrease in prices reflects market optimism that tensions in the Persian Gulf might diminish, although uncertainties persist regarding the longevity of the ceasefire and the full extent of the reopening.

In a separate report, CNN noted that Brent crude, the global oil benchmark, fell approximately 10 percent to around $89 per barrel, while West Texas Intermediate (WTI), the US benchmark, saw a drop of over 10 percent to about $81.50 per barrel.

The declines marked the lowest oil prices seen in several weeks, as indicated by data in a price chart on page 4 of the CNN report, which illustrates the sharp decline following the announcement.

Market reactions were positive beyond the energy sector as well; CNN reported a surge in US stocks, with the Dow Jones climbing 640 points, or 1.2 percent, while both the S&P 500 and Nasdaq also recorded gains.

The catalyst for the sell-off in oil was Iran's Foreign Minister Abbas Araghchi stating, “the passage for all commercial vessels through the Strait of Hormuz is completely open for the remaining ceasefire period.” Traders viewed this as a sign that supply constraints, which had previously driven prices upward since the conflict escalated, might be loosening.

However, analysts warned that the market's response could be premature. The Wall Street Journal, referencing shipping industry experts, indicated that Iran's announcement “doesn't provide sufficient clarity for making firm decisions,” emphasizing ongoing uncertainty about safe navigation.

The US stance has further complicated this uncertainty. President Donald Trump asserted that the naval blockade on Iranian ports would “remain in full force,” raising questions about the actual freedom of vessel operations despite Iran's claims of reopening.

This contradiction between Iran's announcement and ongoing US enforcement efforts has left energy markets in a state of cautious optimism.

The Strait of Hormuz is a crucial route for global energy trade, and any disruptions there have an immediate effect on oil prices. Earlier in the conflict, diminished tanker traffic and assaults on shipping had constrained supply, resulting in a sharp price increase.

The recent downturn indicates that markets are anticipating a temporary stabilization. However, given the limited duration of the ceasefire and unresolved geopolitical tensions, analysts caution that volatility is likely to continue in the short term.