Oil and gas prices fell sharply on Friday after Iran announced the Strait of Hormuz was open to commercial shipping for the duration of a 10-day ceasefire between Israel and Lebanon. Brent crude dropped more than 10% to $88.80 a barrel, well below last month's peak of $119 but still above the pre-war level of $72.
The benchmark European gas contract fell 6.4% to around €39 per megawatt hour as hopes grew that diplomatic progress between the US and Iran could ease the energy crisis. Stock markets rose across Europe and the US, with the FTSE 100 closing up 0.7%.
Iran’s foreign minister, Abbas Araghchi, said vessels would be free to transit the strait during the ceasefire but must follow a route nicknamed the “Tehran tollbooth”, where tankers have been required to pay about $2m for safe passage in recent weeks. It remains unclear whether this fee will still apply or how quickly shipping can resume.
US President Donald Trump later stated that the American naval blockade on Iran’s use of the strait would remain in force until a deal was reached with Tehran, adding that the process “should go very quickly” as most points were already negotiated. Iranian state media contested Araghchi’s claim, calling it “bad and incomplete” and suggesting passage would be void if the blockade continued.
The International Chamber of Shipping gave a cautious welcome to the announcement, with its head Thomas A Kazakos stressing that an “orderly and sustained return to normal transit” would require close coordination between international and regional authorities. About 800 tankers remain stuck in the Gulf, including roughly 300 carrying oil and gas, after the crisis reduced traffic from more than 130 ships a day to a trickle.
