Global oil markets saw a sharp decline on Friday as Hormuz oil prices fell below $84 per barrel following Iran’s announcement to reopen the Strait of Hormuz for all commercial shipping during a ceasefire period.
The move immediately eased fears of supply disruption in one of the world’s most critical energy routes. The Strait of Hormuz handles nearly a fifth of global oil shipments, making it a key chokepoint for international energy trade.
Following the announcement, US benchmark West Texas Intermediate (WTI) dropped by more than 6%, settling near $83 per barrel. Brent crude also slipped sharply, falling over 5% to around $94 per barrel. Traders reacted quickly as geopolitical risk premiums began to fade.
Iran’s decision came through a statement by its Foreign Minister Seyed Abbas Araghchi, who confirmed that commercial passage through the Strait would remain fully open for the duration of the ongoing ceasefire arrangement. The announcement was widely shared on social media and closely monitored by global energy markets.
Analysts say the sudden drop reflects how sensitive global oil prices remain to developments in the Middle East. Even a partial disruption in the Strait of Hormuz can trigger major price swings, affecting fuel costs worldwide, including in Pakistan.
For Pakistan, lower oil prices could bring short-term relief in import bills and inflation pressure. However, experts warn that volatility may continue as the geopolitical situation remains uncertain and dependent on ceasefire stability.
Energy traders will now watch upcoming OPEC+ decisions and regional diplomatic developments to assess whether prices stabilize or face another wave of fluctuation.
While the immediate market reaction has been bearish, analysts believe long-term pricing will still depend on demand trends and global economic conditions.
