NEW: Oil Drops, Stocks Explode After Game-Changing Development In Iran Negotiations

Oil prices plunged and stocks rallied Friday after Iran’s foreign minister said the Strait of Hormuz is “completely open,” a headline shift that traders read as a possible off-ramp in a conflict that has rattled global energy markets.

Iranian Foreign Minister Seyed Abbas Araghchi made the comment in a post on X during a ceasefire window between Israel and Lebanon, saying ships moving through the chokepoint must follow a “coordinated route” set by Iran’s maritime authorities.

The market reaction was immediate. U.S. crude futures for May delivery slid 11.1% to $84.26 a barrel, while Brent for June fell 10.5% to $88.95.

The move followed remarks from President Donald Trump, who said late Thursday the war in Iran, which began Feb. 28, “should be ending pretty soon.” Trump responded Friday by thanking Iran for opening the strait, but he also made clear the pressure campaign is not over, writing that a U.S. naval blockade of Iran’s ports will remain in “FULL FORCE” until Washington reaches a deal with Tehran.

BREAKING: US oil prices crash to $83/barrel as Iran officially reopens the Strait of Hormuz for the remainder of the ceasefire. pic.twitter.com/DorAuSEck9

— The Kobeissi Letter (@KobeissiLetter) April 17, 2026

The latest swing in oil comes as diplomats try to stabilize the region. Israel and Lebanon agreed Thursday to a 10-day ceasefire that began at 5 p.m. ET. Israel has been striking Lebanon in a campaign against Hezbollah, the Iranian-backed terror group long entrenched in the country.

Trump said Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun would be invited to the White House for what he called the first meaningful talks between the two countries since 1983.

The State Department said both sides were trying to create conditions for lasting peace, pointing to mutual recognition of sovereignty and improved border security. It also flagged concerns about non-state armed groups undermining Lebanon’s sovereignty, and Trump said he expects Lebanon to “take care of Hezbollah.”

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Even with Friday’s relief rally, analysts warned the supply risk is not gone. ING said oil had already been drifting lower on expectations the U.S. and Iran could extend their own ceasefire and possibly restart negotiations, but cautioned that the underlying physical market remains strained.

“However, the physical market is becoming tighter every day that passes without a restart of oil flows through the Strait of Hormuz,” ING analysts wrote.

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ING estimates roughly 13 million barrels per day of supply has been disrupted even after accounting for pipeline reroutes and limited tanker movements, and said that figure could grow if the U.S. blockade squeezes flows further.

“The key upside risk for the market is that peace talks between the US and Iran break down,” the bank warned. “This isn’t an unrealistic scenario, given that US and Iranian demands remain fairly wide apart.”

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