Oil prices plunge as Hormuz reopens, but Middle East risk has not disappeared
🛢️ The oil market reacted sharply after Iranian Foreign Minister Abbas Araqchi said the Strait of Hormuz was fully open to commercial shipping for the remainder of the 10-day ceasefire. The announcement quickly removed part of the geopolitical premium that had been building for weeks.
📉 On April 17, Brent briefly fell to $88.80 per barrel while WTI dropped to $83.89, marking a decline of around 11% on the day and the lowest zone since March 11. The move shows how aggressively traders are repricing the chance of smoother energy flows through the Gulf.
🌍 The reaction was so strong because Hormuz remains one of the world’s most critical energy chokepoints, handling roughly 20% of global oil and LNG flows. Once disruption risk eased, pressure on energy prices faded almost immediately.
⚠️ Even so, this is not a full all-clear for the market. The US is still maintaining its blockade on Iranian ships and ports, so oil may cool in the short term, but volatility could return very quickly if the ceasefire breaks down or regional tensions flare up again.