Oil prices fell more than 10 percent and stock markets jumped on Friday after Iran said the Strait of Hormuz would remain “fully open” for the remainder of its armistice with the United States.
Iran’s Foreign Minister Abbas Araghchi said on X that “the route through the Strait of Hormuz has been declared completely open for all commercial vessels for the remaining period of the ceasefire”.
The strategic waterway, through which a fifth of the world’s crude normally flows, has been blocked by Iran since the US-Israeli offensive began, sending oil prices to a peak of around $120 a barrel and threatening to disrupt the global economy.
Benchmark international contract Brent and its US counterpart WTI both fell below $90 a barrel.
“This news is having an immediate impact on the market,” said Kathleen Brooks, director of research at XTB.
Wall Street’s main stock indexes jumped as soon as the opening bell rang, with the S&P 500 and Nasdaq Composite both hitting record highs last evening.
“This is the largest development so far during the armistice, and it gives hope that the war will soon end, and supply chains will return to some normalcy,” Brooks said.
It was unclear whether Araghchi was referring to the 10-day ceasefire agreed by Lebanon and Israel that came into effect at midnight or the two-week ceasefire between Iran and the United States that began on April 8.
But despite US President Donald Trump saying the US blockade of Iran’s ports remains in place, Araghchi’s announcement has boosted hopes for further peace talks and renewal of the ceasefire.
French President Emmanuel Macron and British Prime Minister Keir Starmer were chairing a meeting of allies on Friday to consider sending a multinational force to ensure free-flowing trade in the Strait of Hormuz after the conflict ends.
David Morrison at Trade Nation said the speed and magnitude of the S&P 500’s rebound — up nearly 12 percent in just two weeks — was reinforcing the rally.
He said, “The swiftness of the move has disappointed many investors, especially those who had sold during the first few weeks of the war either to reduce their exposure or to net losses.”
“Now these investors are having to pay up to restore their existing positions, or cover their shorts and suffer painful losses.”
He said the “fear of missing out” effect has also returned as stock indexes have moved into record territory, especially as the first-quarter reporting season sees strong earnings growth.
European stocks were higher in afternoon trading, with Frankfurt and Paris both up two percent.
Asian stock markets closed mostly lower, with Tokyo the biggest loser after hitting a record high on Thursday and Taiwan’s TAIEX index falling after reaching a market capitalization of $4.14 trillion.
This put the index ahead of London’s benchmark FTSE 100 and made TAIEX the world’s seventh-largest index by value, according to Bloomberg data.
Key figures around 1330 GMT
Brent North Sea crude: 9.9 percent fall at $ 89.56 per barrel
West Texas Intermediate: down 10.2 percent at $81.88 per barrel
New York – Dow Jones: up 1.3 percent at 49,221.56 points
New York – S&P 500: up 0.7 percent at 7,092.15
New York – Nasdaq Composite: up 0.9 percent at 24,317.32
LONDON – FTSE 100: up 0.5 percent at 10,64.51
PARIS – CAC 40: up 2.0 percent at 8,427.69
FRANKFURT – DAX: up 2.2 percent at 24,688.97
Tokyo – Nikkei 225: down 1.8 percent at 58,475.90 (close)
Hong Kong – Hang Seng Index: down 0.9 percent at 26,160.33 (close)
SHANGHAI – COMPOSITE: down 0.1 percent at 4,051.43 (close)
Euro/Dollar: Up from $1.1784 on Thursday at $1.1833
Pound/Dollar: Up from $1.3529 to $1.3579
Dollar/yen: down from 159.14 yen to 158.41 yen
Euro/pound: up from 87.09 pence to 87.17 pence