Oil prices tumble as Iran reopens Strait of Hormuz
WTI crude fell sharply to around $83 a barrel after Iran announced it is reopening the Strait of Hormuz to commercial traffic for the remainder of the ceasefire.
The move unwinds much of the recent geopolitical risk premium that had lifted prices above $100 amid tensions and limited tanker flows. The strait carries roughly one fifth of global oil trade, so any easing of disruptions offers quick relief to supply worries.
That said, the drop may prove limited. Insurance costs, shipping rerouting, and physical market tightness do not reset overnight. Many traders note the announcement covers only the ceasefire period, and full normalization of traffic, especially for major operators, remains uncertain.
Markets are pricing in reduced headline risk for now, but underlying constraints could keep a floor under prices in the weeks ahead.