Oil prices saw a significant drop of more than 10% on Friday, continuing a downward trend. This decline followed an announcement by Iran’s foreign minister stating that the Strait of Hormuz would remain open for all commercial vessels during the ongoing ceasefire, similar to the situation in Lebanon.
At 1311 GMT, Brent crude futures (LCOc1) experienced a decrease of $11.12, equivalent to 11.2%, settling at $88.27 per barrel. Similarly, U.S. West Texas Intermediate crude futures (CLc1) also fell by $11.40, or 12%, to reach $83.29 a barrel.
Analyst Giovanni Staunovo from UBS noted that the remarks from Iran’s foreign minister signaled a reduction in tensions as long as the ceasefire persisted. He emphasized the importance of monitoring whether there would be a substantial rise in the number of tankers passing through the Strait in the coming days.
Earlier in the trading session, prices had already been on a downward trajectory due to the possibility of renewed discussions between the U.S. and Iran over the weekend, coupled with a 10-day ceasefire between Lebanon and Israel. These developments fueled optimism among investors that the conflicts in the Middle East could be approaching resolution.
In a bid to address a critical issue in the negotiations to end the conflict with Iran, President Trump mentioned that Tehran had proposed a commitment to refrain from possessing nuclear weapons for more than two decades. Trump expressed optimism about reaching a deal with Iran, stating that progress was imminent during a press briefing outside the White House on Thursday.