Oil Prices Plunge as Strait of Hormuz Reopens Amid Geopolitical De-escalation

Global energy markets experienced a sharp correction on Friday as Iranian Foreign Minister Seyed Abbas Araghchi confirmed the reopening of the Strait of Hormuz to all commercial vessels. The move coincides with a ceasefire between Israel and Lebanon, signaling a potential end to regional hostilities that had previously pushed oil prices toward $110 per barrel. The sudden shift in geopolitical risk has triggered a rapid repricing of crude oil. While the S&P 500 rose 1% on the news of stability, energy equities faced significant headwinds as the 'war premium' evaporated from commodity pricing. Brent crude fell below $89 per barrel, while WTI dropped to just over $84, both marking an 11% decline. ConocoPhillips (COP) saw its shares slide 6.6%, with market participants noting the stock's valuation of 19 times earnings may be stretched given a projected long-term growth rate of 12% in a lower-price environment. Despite the drop, prices remain significantly higher than the $60 levels seen several months ago. However, the immediate volatility reflects the market's sensitivity to the Persian Gulf's stability. President Trump confirmed the reopening and the removal of mines, though he noted that U.S. blockades on ships traveling to Iran remain active.