Crude oil prices have plunged over 10 per cent following the reopening of the Strait of Hormuz as oil tankers started to exit the Persian Gulf again to carry crude to customers globally.
While the fall in prices started on Friday, the prices are expected to fall further until the ceasefire between the United States and Iran and Israel and Lebanon holds.
On Saturday, Brent crude opened at $86.52 per barrel, down from $98, which occurred less than two hours after Iranian Foreign Minister Abbas Araghchi declared the passage open on X.
“Passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of ceasefire,” he said.
Meanwhile, the US-based West Texas Intermediate crude also fell to $80.56 per barrel after opening around $93.
During the hot war between Iran and the United States, oil prices had touched nearly $120 a barrel and threatened to disrupt the global economy during the conflict.
The Strait of Hormuz is one of the most critical waterways in the world, since it handles nearly 20 per cent of the global oil trade.
More than 500 million barrels of crude and condensate have been knocked out of the global market, making it the largest disruption of energy supply in modern history, according to Kpler data.
Arsenio Dominguez, secretary-general of the UN shipping agency, the International Maritime Organisation, said the organisation was “currently verifying the announcement”.
Also read: World leaders react cautiously as Iran reopens Strait of Hormuz
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