Oil prices plunge as markets rally after Strait of Hormuz reopens

Global oil prices tumbled sharply on Friday while stock markets surged, after Iran announced the full reopening of the Strait of Hormuz, easing fears of a prolonged energy disruption.

Benchmark U.S. crude dropped more than 10%, falling to just over 81 dollars a barrel, while Brent crude also saw a steep decline. The move signals renewed confidence that oil supplies can once again flow freely from the Persian Gulf to global markets.

The announcement sparked a strong rally on Wall Street, with the S&P 500 climbing close to another record high. The Dow Jones Industrial Average jumped more than 600 points, while the Nasdaq Composite also posted solid gains.

Investor optimism has been building in recent weeks, driven by hopes that tensions between the United States and Iran may ease. U.S. President Donald Trump added to that sentiment, saying the conflict “should be ending pretty soon.”

Markets had been volatile since the outbreak of the Iran war, with sharp swings in oil, stocks, and bonds reflecting uncertainty over global supply chains and economic stability. Despite the latest drop, oil prices remain higher than pre-conflict levels, suggesting lingering caution among investors.

Beyond energy markets, strong corporate earnings have also supported the rally, with several major U.S. financial firms reporting better-than-expected results.

In Europe, stocks surged in response to the news, with major indexes in France and Germany rising more than 2%. However, Asian markets, which closed before the announcement, ended the day lower.

Meanwhile, bond yields declined as falling oil prices eased concerns about inflation, offering further support to global markets.

The reopening of the Strait of Hormuz marks a critical turning point, raising hopes that one of the biggest threats to the global economy may be starting to recede.