Oil and European natural gas prices tumbled after Iran said that the Strait of Hormuz is “completely open,” raising hopes that the unprecedented disruption to the critical shipping artery may soon be nearing an end.Brent futures retreated near $89 a barrel in London, erasing most gains since the start of the US-Iran war, while West Texas Intermediate slumped to around $83 in New York. European benchmark gas prices fell as much as 10% near 38 euros a megawatt-hour. Prices plummeted after Iran said it would open the Strait of Hormuz for the duration of a 10-day ceasefire between Israel and Hezbollah in Lebanon. The waterway is now “completely open” for commercial shipping, Iran’s foreign minister Abbas Araghchi posted on X on Friday.“The market is now pricing that the war and the closure of the Strait is over,” said Arne Lohmann Rasmussen, chief analyst at Global Risk Management. “That said we notice that it is only for vessels going along the Iranian coast line. So maybe not a full opening.”Friday’s moves stoked optimism there may be an end in sight to the seven-week long conflict, which ushered in the worst global energy supply disruption in recent history. In oil markets, trend-following commodity trading advisers liquidated long positions to sit at 27% long in Brent on Friday, compared with 82% at the start of the session, according to data from Kpler’s Bridgeton Research group.Between Europe and the US, prices of middle distillates such as gasoil and diesel led the oil complex down, with gasoil prices falling by as much as 16% at their lows of the day.BLOOMBERG
