Energy Markets Plunge as Iran Reopens Strait of Hormuz

Crude oil prices experienced a sharp correction on Friday after Iranian Foreign Minister Seyed Abbas Araghchi announced that the Strait of Hormuz is now open to all commercial vessels. The move, coinciding with a ceasefire between Israel and Lebanon, has significantly eased fears of a total blockade in one of the world's most critical maritime chokepoints. The announcement led to a rapid repricing of energy assets as investors pivoted away from 'war premium' pricing. While the S&P 500 rose 1.2% on the news of regional stability, energy majors faced heavy selling pressure as the prospect of uninterrupted oil flow from the Persian Gulf became the dominant narrative. Price action was severe across benchmarks. WTI crude plummeted 13% to $82 per barrel, while Brent crude fell nearly 12% to drop below $88. This represents a steep decline from recent peaks where Brent approached $110, although prices remain well above the $60 levels seen at the start of the year. ExxonMobil (XOM) was among the hardest hit, with shares falling 5.3%. Market analysts suggest the stock's valuation, currently exceeding 22 times earnings, may be under pressure given a projected growth rate of 11%, making the company appear expensive in a lower-price oil environment. President Trump confirmed the reopening and the removal of mines from the Strait via Truth Social. However, he disputed the claim that the move was tied to the Israel-Lebanon truce and noted that U.S. blockades on Iranian ships remain active.