Stocks surged and oil prices plunged sharply on Friday, with US crude for May delivery falling more than 10% after Iran declared the Strait of Hormuz “completely open.”
The oil selloff came as a ceasefire between Israel and Lebanon raised hopes that disrupted supply could return to market, though analysts cautioned that as much as 13 million barrels per day remains impacted, keeping underlying conditions tight.
Stocks soared, with the Dow Jones Industrial Average jumping 868 points, or 1.8%, to 49,447 as investors cheered signs that shipping could resume through the Strait of Hormuz.
Brent crude dropped 9% to settle at $90.38 per barrel. West Texas International declined 11% to $83.85.
The S&P 500 rose 1.2% and closed above 7,100 for the first time, and the Nasdaq gained 1.5% for its 13th consecutive winning day and its longest positive streak since 1992
Iranian Foreign Minister Seyed Abbas Araghchi said Friday that the Strait of Hormuz is now “completely open” to commercial shipping during the Israel-Lebanon ceasefire, a move that immediately calmed global markets and triggered a sharp selloff in oil.
“In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire, on the coordinated route as already announced by Ports and Maritime Organisation of the Islamic Rep. of Iran,” Aragchi wrote on X.
President Trump said Thursday that the leaders of Israel and Lebanon agreed to a 10-day ceasefire, which went into effect at 5 p.m. Eastern Time.
Drivers are getting a modest reprieve at the pump, with the national average price for regular gas slipping 7 cents over the past week to about $4.09 per gallon as oil prices ease.
Still, prices remain elevated compared to recent months, with the current national average up sharply from $3.72 a month ago and $3.17 a year ago.
US demand is also picking up, rising to 9.08 million barrels per day last week, even as total domestic gasoline inventories fell to 232.9 million barrels, according to AAA.
That combination of stronger consumption and tightening supply could limit how much further prices fall in the near term.
Experts are cautiously welcoming the development, warning that key questions remain about whether the calm will last.
“This is great news, but it might be a temporary reprieve,” Derek Reisfield, co-founder and former chairman of MarketWatch, told The Post.
“The ultimate question is do hostilities cease for the long term. Do we have a settlement that allows oil and other critical commodities, like urea, to flow out of the Persian Gulf uninterrupted? Or, are we back to a supply disruption in a few weeks.”
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