Oil prices tumbled and stock markets surged worldwide on Friday after Iran announced it had fully reopened the Strait of Hormuz, restoring commercial shipping through one of the world’s most critical energy corridors.
Brent crude dropped 11% to just over US$88 a barrel in afternoon trading a sharp reversal from the highs of US$120 seen earlier in the conflict. It is the first time the strait has been completely open since hostilities between the US, Israel and Iran erupted on February 28.
The news triggered an immediate market reaction. In the US, the Dow Jones Industrial Average jumped 1.6% in early trading, reflecting renewed optimism that global supply chains may stabilise.
Kathleen Brooks, research director at XTB, called the reopening “the biggest development so far during the ceasefire,” saying it offers genuine hope that the war could wind down and trade flows return to normal. She cautioned that clearing the backlog of tankers and repairing Gulf infrastructure damaged by Iranian drones will take time, but described the development as a major boost for the global economic outlook.
Brooks added that while risks remain, the likelihood of Iran shutting the strait again is now “minimal,” noting that Tehran also relies on the route to export its own oil and support revenues.
Despite the global rally, London’s FTSE 100 lagged behind, held back by declines in energy and oil stocks sectors that typically fall when supply fears ease.
With the strait open and markets responding positively, analysts say the remainder of the year looks brighter for the global economy, though geopolitical uncertainty still looms.
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