Global oil prices dropped sharply on Friday after Iran signalled that the Strait of Hormuz would remain open to commercial shipping during a temporary ceasefire in the Middle East.

Benchmark crude prices fell by more than 10 per cent, with West Texas Intermediate (WTI) slipping below $85 per barrel, while Brent crude declined to about $89 per barrel.

The decline follows comments by Iran’s Foreign Minister, Abbas Araghchi, who said commercial vessels would be allowed to transit the strait for the duration of a 10-day ceasefire involving Israel and Lebanon.

The truce, which began on Thursday, is reported to include the Iran-backed group Hezbollah.

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Oil prices had surged above $100 per barrel in recent weeks amid heightened tensions in the region, with WTI reaching nearly $113 per barrel earlier this month and Brent climbing above $119 in late March.

Analysts say the reopening of the key shipping route has eased supply concerns in global energy markets.

Brian Therien, a senior investment strategist at Edward Jones, noted that oil futures are now trending lower, with projections suggesting prices could fall to the low $70 range by the end of the year. He added that a sustained drop in prices could help reduce inflationary pressures globally.

The Strait of Hormuz, which links the Persian Gulf to the Arabian Sea, is one of the world’s most critical oil transit routes, accounting for roughly one-fifth of global oil and liquefied natural gas shipments.

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Shipping through the passage had been disrupted during the conflict due to security concerns, including threats of attacks and the presence of naval mines.

An Iranian official told Reuters that vessels moving through the strait during the ceasefire would be required to use designated safe lanes approved by Iranian authorities, while military ships would not be permitted to pass.

Despite the announcement, some shipping firms remain cautious. German carrier Hapag-Lloyd said it is still reviewing the situation before resuming operations in the area.

Meanwhile, Knut Arild Hareide of the Norwegian Shipowners’ Association welcomed the development but warned that uncertainties remain, particularly regarding maritime safety, operational guidelines, and the potential risks posed by unexploded sea mines.

Germany legend, Oliver Kahn, has insisted that one cannot go to the United States with ‘good feelings’ since President Donald Trump returned to the Presidency.

Kahn stated this while speaking to Sky Sport Germany about the upcoming World Cup, which is to be held in the US, Mexico and Canada.

According to the former Bayern Munich goalkeeper, there are so many things happening in the US at the moment that are no longer compatible with ‘values’.

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“There are simply so many things happening in the USA right now that are no longer compatible with our understanding of values,” Kahn said.

“One example was the war, but I don’t want to list everything Donald Trump has been doing there since he returned to the presidency.

“You can’t go there with a good feeling at the moment.”

United States President, Donald Trump, has ordered a U.S. naval blockade of the Strait of Hormuz following Iran’s refusal to abandon its nuclear programme during peace talks in Islamabad, Pakistan.

Trump said on Sunday that negotiations held in Islamabad were largely successful, noting that “most points were agreed to,” but insisted Tehran remained firm on its nuclear ambitions.

“Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz,” Trump said on Truth Social.

“Any Iranian who fires at us, or at peaceful vessels, will be BLOWN TO HELL!”

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According to Nigerian Tribune, talks ended without a deal as US Vice President JD Vance departed Pakistan after meeting with an Iranian delegation led by Mohammad Bagher Ghalibaf. The meeting marked the highest-level engagement between both sides since the 1979 Islamic Revolution.

“We leave here with a very simple proposal, a method of understanding that is our final and best offer. We’ll see if the Iranians accept it,” Vance told reporters.

In separate posts, Trump criticised Iran for failing to reopen the Strait of Hormuz, a critical route responsible for transporting about one-fifth of the world’s crude oil.

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“They say they War: We Won’t Let Iran Have Nuclear Weapons – Trump Insistsput mines in the water, even though all of their Navy, and most of their ‘mine droppers,’ have been completely blown up. They may have done so, but what ship owner would want to take the chance?” Trump said.

The waterway has remained effectively closed for weeks following a bombing campaign launched by the United States and Israel against Iran more than six weeks ago.

On Saturday, the US military confirmed that two warships had passed through the strait as part of a mine clearance operation.

(AFP)