Oil Prices Plunge 11% as Iran Reopens Strait of Hormuz

Oil prices experienced a significant decline of 11.4% following Iran's announcement that the Strait of Hormuz is fully open to commercial shipping. U.S. crude oil prices fell to $83.85 per barrel, marking the lowest level since March 10, while Brent crude dropped by 9% to $90.38 per barrel.

This decline is noted as the second largest since the onset of the war. The reopening was confirmed by Iranian Foreign Minister Abbas Araghchi, who stated that commercial vessels can now pass freely.

In response to the price drop, analyst Patrick De Haan indicated that lower oil prices could lead to reduced gasoline prices, potentially falling below $4 per gallon. The announcement also prompted a rally in European stock markets, with the Stoxx 600 index rising by 1.4%.

U.S. Treasury yields fell sharply, reflecting market reactions to the oil price changes.

The situation remains dynamic, with shipping companies like Maersk and Hapag-Lloyd assessing risks before transit through the Strait.