Oil prices plunge as Iran says Strait of Hormuz 'open' during ceasefire

Key Points:

• Oil prices dropped sharply after Iran announced the Strait of Hormuz would remain "completely open" to commercial ships during the ceasefire in the US-Israel war with Iran, with Brent crude falling from above $98 to around $88 per barrel.
• The Strait of Hormuz, a critical chokepoint for about a fifth of the world's oil and liquefied natural gas, had been effectively closed by Iran since late February, causing global oil prices to spike above $119 per barrel in March.
• Despite Iran's declaration, the international shipping body BIMCO and the International Maritime Organization (IMO) expressed caution, citing unclear mine threats and minimal ship movements, advising shipping companies to carefully assess risks before transiting the waterway.
• The ceasefire and reopening of the Strait offer a limited window for oil tankers to resume passage, potentially easing some supply constraints, but uncertainties remain about a full return to pre-war shipping levels.
• The conflict and closure of the Strait have also disrupted fertilizer supplies, contributing to rising food prices, while the recent easing of fuel prices in the UK marks the first decline since the conflict began.