Iran reopens Strait of Hormuz as oil prices retreat from recent highs

(Bloomberg) — Iran said it has reopened the Strait of Hormuz to commercial shipping during a 10-day ceasefire between Israel and Hezbollah in Lebanon, easing a key bottleneck for global oil flows. The development capped a volatile week for global oil markets, which saw sharp price swings driven by supply disruptions and shifting geopolitical signals.

Iranian Foreign Minister Abbas Araghchi said the strategic waterway is now “completely open,” marking the first significant shift in transit conditions since the strait was effectively shut following the escalation of conflict in late February.

The announcement initially sent oil prices sharply lower, with crude retreating from recent highs as traders responded to the prospect of restored supply flows through one of the world’s most critical energy chokepoints. Prices have since stabilized amid ongoing uncertainty over the durability of the ceasefire and the pace of shipping normalization.

The Strait of Hormuz typically handles roughly one-fifth of global oil and LNG shipments. Its closure in recent weeks removed substantial volumes from the market, contributing to elevated prices and heightened volatility.

The reopening comes as a ceasefire between Israel and Hezbollah appears to be holding, potentially creating momentum for broader negotiations between the U.S. and Iran. Officials have been weighing an extension of their own ceasefire, with talks ongoing over key issues including nuclear policy, sanctions relief and maritime security.

While the reopening signals a potential easing of tensions, uncertainty remains over how quickly tanker traffic and cargo flows will fully normalize. The U.S. has maintained pressure on Iranian exports, including recent enforcement actions and a naval presence in the region, while warning that military operations could resume if negotiations falter.

Any sustained reopening of Hormuz will be critical for stabilizing global oil markets, particularly as recent disruptions have tightened supply and amplified price volatility.

Map of the Strait of Hormuz. Source: Global Energy Infrastructure.