Strait of Hormuz Reopens: Brent Drops $10, Stocks Rally

Iran says the Strait is “completely open”

Iran’s foreign minister said on Friday that the Strait of Hormuz is “completely open” for commercial shipping. The statement immediately hit energy markets. Brent crude dropped by roughly $10 within minutes to around $19 a barrel. U.S. equities also reacted, with stocks moving to a fresh record high, reflecting easing fears of an extended energy shock.

The announcement came after weeks in which shipping through the narrow waterway had been disrupted and, at points, effectively halted. The Strait is widely viewed as the most critical chokepoint for seaborne oil flows. In this episode, it also became the fastest-moving barometer of escalation and de-escalation.

Trump claims credit while keeping pressure on Iranian ports

U.S. President Donald Trump quickly claimed credit on Truth Social, posting that the Strait is “COMPLETELY OPEN AND READY FOR BUSINESS.” But he also said the U.S. naval blockade of Iranian ports would remain in place until a deal with Iran is “100% COMPLETE.” Trump added that the negotiation process “SHOULD GO VERY QUICKLY,” arguing most points were already worked out.

The combination of a reopened chokepoint and an ongoing blockade underlines the uneven nature of the de-escalation. It also helps explain why traders could mark crude sharply lower on the headline, while ship operators and insurers may still be reluctant to treat the route as normal.

“Open” on paper, but shipping confidence is still missing

Despite the public messaging, it was unclear when commercial shippers would feel confident resuming normal operations. Some executives told The Wall Street Journal they were waiting for clearer security guarantees. Before the war, traffic in the Strait ran around 135 vessels a day, according to the report.

Separate reporting highlighted how far conditions still are from normal. Only four ships reportedly passed through the Strait on one recent day, compared with an average of about 100 per day before the war. That gap between official declarations and observed traffic is one reason the ceasefire has been described as fragile.

Why the Strait matters: about 20% of global oil

Roughly 20% of the world’s oil and a large share of LNG transit the Strait of Hormuz. When Iran effectively closed it in February, the impact rippled quickly through the global economy. Asia and Europe faced blackouts and rationing, and fertilizer supplies tightened, threatening crop yields.

The disruption did not spare countries aligned with Tehran either. Jim Krane, a Gulf energy expert at Rice University’s Baker Institute, said even Iraq had to shut in oil production because it could not move its gas, forcing its power grid into rolling outages. The breadth of those consequences, Krane argued, ultimately increased pressure on Iran itself.

Analysts describe Hormuz as a “deterrent” tool

Krane described the Strait’s role in stark terms, saying it functions “almost like a nuclear deterrent.” His argument was that control over Hormuz can be a powerful card because it can hold the global economy hostage by threatening energy flows.

Other analysts echoed the idea that the conflict changed the negotiating terrain. Hamidreza Azizi of the German Institute for International and Security Affairs said control of the Strait is a kind of leverage that is visible in markets and can be sustained over time. Danny Citrinowicz, a former head of the Iran branch in Israeli military intelligence, told the Wall Street Journal the Strait has become as strategically important to Iran as “missiles and the nuclear program.”

Disrupted supply and a slower-than-expected normalization

Veteran analyst Michael Morse said roughly 10 million barrels a day of supply have been disrupted for 45 days. Even if the Strait reopened fully overnight, Morse warned it would take at least seven weeks for oil that left the Middle East before the war to reach Asia-Pacific markets.

He said there would not be oil reaching normal destinations for almost two months under an optimistic assumption of rapid production and flow recovery, which he did not expect. The timeline matters because it separates the headline impact on prices from the physical reality of supply chains, shipping schedules, and inventory replenishment.

Mines, selective guidance, and a month-long clearance risk

Iran has also said it placed mines in the Strait of Hormuz. According to the account cited, Iran used knowledge of mine locations as leverage by guiding select ships safely around them, limiting passage without Iranian approval.

Mine clearance could stretch the recovery timeline further. Trump posted that mine clearance is happening with Iran’s cooperation, but clearance could take the better part of a month depending on that cooperation. Until the risk is credibly reduced, shippers may continue to treat “open” as conditional.

Iran’s bargaining position widens beyond the nuclear file

Commentary in the broader coverage argued that Tehran now enters talks with a stronger hand than in prior negotiating rounds. Earlier talks were framed around nuclear enrichment and ballistic missile ranges, but recent reporting suggests influence over Hormuz is now central.

Vali Nasr, a Middle East expert at Johns Hopkins University, told the Wall Street Journal that the Strait has become more important to the Iranian regime than its nuclear program, and linked it to revenue generation and regime survival. Iranian parliament security committee chairman Ebrahim Azizi was quoted saying the Strait would reopen, but passage would be permitted only for countries that follow Iran’s new rules.

India angle: “friendly nations” access and energy continuity

Iran’s embassy in New Delhi said its “Indian friends are safe” in the Strait of Hormuz. Around six Indian ships were reported to have sailed safely through, though it was unclear whether there is a formal arrangement for safe passage.

In an interview carried by Reuters, Foreign Minister Abbas Araghchi said some shipowners or countries had requested safe passage and that Iranian armed forces provided it for countries considered friendly. He named India among “friendly nations,” alongside Russia, China, Pakistan and Iraq, while saying ships belonging to the United States, Israel and their allies would not be allowed to transit.

Indian coverage framed the Strait as an energy lifeline linking India to suppliers such as Iraq, Saudi Arabia, the UAE and Qatar, and noted that any disruption can push up oil and gas prices, widen the trade deficit, and trigger domestic inflation. It also said India has stepped up its presence with its navy securing Indian ships in the Gulf, while government officials maintained flows remained stable even as some vessels stayed on standby.

Key facts at a glance

What investors will track next

Markets have already shown they will reprice quickly on Hormuz headlines, but the next leg depends on operational confirmation. Traders and risk managers will likely watch daily transit volumes, the pace of mine-clearance activity, and whether insurers and ship operators accept the security environment.

Diplomatically, attention is on whether talks, including those referenced as resuming in Islamabad, can convert the ceasefire into a broader agreement. Until then, the Strait’s status may remain the practical test of calm, especially if passage is applied selectively by nationality.