Oil Falls 10%, Markets Rally As Iran Reopens Strait Of Hormuz During Ceasefire

Last Updated:April 17, 2026, 22:19 IST

Oil and gas prices plunge as Iran vows to keep Strait of Hormuz open during 10 day ceasefire, markets rally, but US naval restrictions stay and analysts warn risks remain.

Global oil and gas prices dropped sharply on Friday after Iran signalled that the Strait of Hormuz would remain open to commercial shipping during a 10-day ceasefire, raising hopes that disrupted energy supplies could begin flowing again.

Brent crude, the international benchmark, fell more than 10% to $88.8 a barrel, down significantly from last month’s peak of $119, though still above pre-war levels of around $72.

Ceasefire opens path for tankers

Iran’s foreign minister Abbas Araghchi said vessels would be allowed to transit the strait for the duration of the ceasefire between Israel and Lebanon, potentially clearing a route for hundreds of stranded tankers.

The move could unlock millions of barrels of oil and gas currently held in the Gulf, where shipping has been severely disrupted since the conflict escalated.

Before the crisis, more than 130 ships passed through Hormuz daily, but traffic has slowed dramatically under threats from Iran. Around 800 tankers remain stuck, including roughly 300 carrying oil and gas.

Gas prices drop, equities rise

European gas prices also fell sharply, with the benchmark contract dropping around 8.5% to €38.80 per megawatt hour, as markets reacted to signs of de-escalation.

Global equities rallied on the news. Germany’s DAX and France’s CAC rose over 2%, while in the US, the Dow Jones and S&P 500 gained more than 1%. In London, the FTSE 100 edged up, though energy majors like BP and Shell fell as crude prices declined.

Trump signals blockade to continue

Despite Iran’s announcement, US President Donald Trump said Washington’s naval restrictions on Iran’s use of the strait would remain in place until a broader agreement is reached.

He added that negotiations with Tehran were progressing and “should go very quickly", suggesting a possible diplomatic breakthrough.

Crisis far from over

The Strait of Hormuz, a critical chokepoint through which about a fifth of the world’s oil flows, has been at the centre of what the International Energy Agency has called the largest energy supply disruption in history.

Although prices have begun to ease, analysts caution that uncertainty remains high, particularly over whether the ceasefire will hold and whether shipping companies will risk sending vessels through the strait.

Iran has also imposed strict transit conditions in recent weeks, with some tankers reportedly required to pay steep fees for safe passage — raising further questions about how quickly normal shipping can resume.

As UBS analyst Giovanni Staunovo noted, the reopening signals de-escalation — but a sustained recovery in flows will depend on whether tanker traffic picks up meaningfully in the coming days.

News world Oil Falls 10%, Markets Rally As Iran Reopens Strait Of Hormuz During Ceasefire

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