Oil prices drop by 10% after Iran reopens the Strait of Hormuz

Saturday, April 18, 2026 - Global markets rallied sharply on Friday, April 17, after Iran announced the reopening of the Strait of Hormuz, easing fears of prolonged disruption to global oil supplies.

Oil prices dropped more than 10%, with U.S. crude falling 10.8% to $81.28 per barrel, while Brent crude declined 10.3% to $89.13. The reopening of the key shipping route allows oil tankers to once again move freely out of the Persian Gulf to international markets.

On Wall Street, stocks surged as investor confidence strengthened. The S&P 500 rose 0.8%, the Dow Jones Industrial Average climbed 678 points (1.4%), and the Nasdaq Composite gained 1%. The gains put U.S. markets on track for a third consecutive week of strong performance.

The rebound comes as hopes grow that the United States and Iran may avoid a worst-case economic fallout from the ongoing conflict. U.S. President Donald Trump said the war “should be ending pretty soon,” reinforcing optimism among investors.

Iran’s Foreign Minister Seyed Abbas Aragchi confirmed that the Strait would remain open for commercial vessels during the ceasefire period, provided they follow designated routes. However, Iranian authorities indicated that military vessels would still not be permitted through the waterway.

Despite the reopening, tensions remain elevated. The United States is maintaining a naval blockade targeting Iranian-linked shipping, with Trump stating the restriction will remain “in full force” until a final agreement with Tehran is reached.

Markets have been volatile since the conflict began, with sharp swings driven by uncertainty over supply disruptions. The reopening of the Strait is the clearest sign yet of stabilisation, although oil prices remain above pre-war levels, indicating continued caution.

European markets also reacted positively, with major indexes posting gains of around 2%, while Asian markets had closed lower earlier before the announcement.

In the bond market, U.S. Treasury yields fell as declining oil prices reduced inflation concerns, with the 10-year yield easing to 4.24%. While risks remain, the reopening of the Strait of Hormuz has significantly improved market sentiment, at least in the short term.