Oil Falls About 10 Percent After Iran Declares Strait of Hormuz Open

Oil prices fell by roughly 10 percent on Friday and Wall Street rallied after Iran’s foreign minister declared the Strait of Hormuz “completely open” to commercial ships, CBS News and the Associated Press reported.

Foreign Minister Seyed Abbas Araghchi wrote on X that passage for all commercial vessels is open “for the remaining period of ceasefire” along a route Iran had already announced, in line with the ceasefire between Israel and Lebanon, CBS News reported. About one-fifth of the world’s oil normally moves through the strait, and traffic there had slowed sharply since the war began on Feb. 28, pushing crude at times close to $120 a barrel, according to CBS News. U.S. crude fell about $9.47, or 10.3 percent, to $84.95 on Friday, CBS News reported, citing oilprice.com. The AP, reporting earlier in the day, put it at $81.28. Brent, the international benchmark, was near $90 in both accounts. The AP noted that prices remain above the roughly $70 level before the war (NPR put the pre-war benchmark nearer $60).

Stocks climbed. CBS News said the S&P 500 closed up 1.2 percent at 7,126 and the Dow Jones Industrial Average gained 869 points, or 1.8 percent, to close at 49,447. The AP said the S&P 500 was headed for a third straight weekly gain and that stocks have risen more than 11 percent since a late-March low on hopes the war will not become the worst-case scenario for the global economy. Treasury yields eased as lower oil took pressure off inflation, the AP reported.

Drivers may see relief with a delay. AAA data showed the national average for regular gasoline at $4.08 on Friday, down from this year’s high of $4.17 on April 9, CBS News reported. Patrick De Haan, chief petroleum analyst at GasBuddy, told NPR the average could fall below $4 as soon as the weekend and reach $3.65 to $3.85 in a week or two if crude holds. He predicted about half of the war-related increase could be reversed by Labor Day, with prices under $3 taking much longer.

The relief comes with warnings. Angie Gildea of KPMG told NPR that reopening the strait “eases the near term squeeze on oil markets, but it’s not a full reset,” because damage to gas infrastructure and delayed production “could linger for months.” NPR cited an estimate from Rystad Energy that repairs to Middle East oil and gas facilities could cost as much as $50 billion.

Diplomacy is unsettled. President Trump told CBS News on Friday that Iran has “agreed to everything,” including working with the U.S. to remove its enriched uranium, but a spokesperson for Iran’s foreign ministry said later that transferring uranium to the U.S. was not “an option,” CBS News reported. Mr. Trump said the U.S. blockade of Iranian ports will continue “until we get it done.” U.S. Central Command said 19 vessels had turned around under the blockade since it began earlier this week, according to CBS News. The AP noted that optimism on Wall Street has repeatedly swung to doubt since the war began.