Global oil markets and equities staged a sharp turnaround on April 17 after Iran signalled a reopening of the vital Strait of Hormuz, easing fears of prolonged supply disruptions. 

Oil prices plunged more than 13% during the session, marking their steepest reversal in over six weeks. US crude futures for May delivery dropped over 11% to around $84 per barrel, while Brent crude for June delivery fell more than 10% to just under $89. The sharp correction comes after weeks of elevated prices driven by escalating tensions in West Asia. 

The trigger for the sell-off was a statement by Iran’s Foreign Minister Seyed Abbas Araghchi, who declared that the Strait of Hormuz is now “completely open” amid a temporary ceasefire in the region. The narrow maritime corridor is critical to global energy markets, handling roughly 20% of the world’s crude oil and liquefied natural gas shipments. 

The geopolitical backdrop also showed tentative signs of easing. US President Donald Trump said the conflict involving Iran “should be ending pretty soon,” reinforcing market optimism. However, he maintained that a US naval blockade on Iranian ports would continue until a formal agreement is reached. 

On the ground, Israel and Lebanon entered a 10-day ceasefire following weeks of hostilities linked to Iran-backed Hezbollah. The conflict had complicated ongoing US-Iran negotiations and raised fears of a broader regional disruption to oil flows. 

Equity markets responded positively to the cooling tensions and falling energy prices. The S&P 500 surged 1.4%, putting Wall Street on track for a third consecutive week of strong gains — its longest winning streak since late October. Lower oil prices are expected to ease inflationary pressures globally, offering relief to both consumers and central banks. 

Earlier in the week, analysts had warned that crude prices could spike as high as $150 per barrel if the conflict escalated further. Concerns were also mounting over potential disruptions at the Bab el-Mandeb Strait, where Yemen’s Houthi rebels — aligned with Iran — had threatened to choke off supplies. 

Published on: Apr 17, 2026 9:12 PM IST