Iran's Foreign Minister, Abbas Araghchi, announced on Friday that the passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of the ceasefire between Israel and Lebanon [1][2]. This declaration was made in line with the ongoing ceasefire, which began at 5 p.m. ET on Thursday and is set to last for 10 days [2]. Araghchi specified that vessels must transit through a 'coordinated route' as announced by Iran's Ports and Maritime Organisation [1][2].
The market reacted strongly to the news. Oil prices plunged more than 11% following the announcement [2]. Additionally, US stock index futures rose between 0.5% and 0.8%, and the US Dollar Index fell by 0.37% to 97.80 at the time of reporting [1]. These movements indicate a significant improvement in risk sentiment, likely due to reduced concerns over potential disruptions to a critical global shipping lane.
The ceasefire between Israel and Lebanon, which involves Israel's military campaign against Hezbollah, a group closely allied with Iran, has been a key point in negotiations between Washington and Tehran [2]. Iran's decision to open the Strait of Hormuz for commercial traffic during this period is directly tied to the ceasefire's duration [1][2].
No forward-looking statements or analyst opinions were provided in the sources.
CONCLUSION
Iran's move to fully open the Strait of Hormuz during the Israel-Lebanon ceasefire has led to a sharp drop in oil prices and improved global risk sentiment. The market response underscores the strategic importance of the strait and the influence of Middle East geopolitics on energy and financial markets.