Oil prices fell sharply, with Brent crude dropping to $90.38 per barrel and U.S. crude plunging 11.4 percent to $83.85, the second-largest one-day decline since the war began. The drop followed an announcement by Iranian Foreign Minister Abbas Araghchi that the Strait of Hormuz was open for commercial vessels for the remainder of a ceasefire, citing a coordinated route established by Iran's Ports and Maritime Organisation. President Donald Trump confirmed the reopening in a post on Truth Social, writing, "IRAN HAS JUST ANNOUNCED THAT THE STRAIT OF IRAN IS FULLY OPEN AND READY FOR FULL PASSAGE. THANK YOU!" However, he added that the U.S. naval blockade on Iran would remain in place until a transaction with Iran was fully completed. It remains unclear whether the "coordinated route" implies a toll for ships, a practice reportedly seen in recent weeks. GasBuddy analyst Patrick De Haan suggested the oil price shift could lower U.S. fuel prices to between $3.65 and $3.85 per gallon, down from the current average of $4.09. Despite the drop, oil prices are still up 25 percent since the war began and over 45 percent since the start of the year. Global markets reacted positively, with the S&P 500 rising 1.2 percent and the Nasdaq gaining 1.5 percent, both closing at record highs, while the Dow jumped 868 points. European markets also surged, with the Stoxx 600 up 1.4 percent, Germany's DAX rising 2.2 percent, and the FTSE 100 gaining nearly one percent. E.U. diplomat Kaja Kallas emphasized that transit through the strait must remain free under international law, warning that any pay-for-passage system would set a dangerous precedent. French President Emmanuel Macron and U.K. Prime Minister Keir Starmer, attending a summit at the time, welcomed the news but stressed the need for neutral oversight and no tolls. Shipping firms including Hapag-Lloyd expressed caution, stating decisions on transiting the strait would depend on ongoing risk assessments and security monitoring over the next 24 to 36 hours.
Trump celebrates the reopening of the Strait of Hormuz while maintaining a naval blockade on Iran, creating a contradictory stance that undermines the credibility of the gesture. The U.S. president's insistence on keeping sanctions in place even as commercial passage resumes suggests the move is more about optics than genuine de-escalation. Shipping companies remain hesitant, and with no clarity on tolls or security, the strait's reopening offers little immediate relief for global supply chains.
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