-- EMEA crude futures retreated by over 10% after-hours trading on Friday after Iran said the Strait of Hormuz is open to commercial shipping, easing fears of a prolonged disruption to flows via the world's most critical energy chokepoint.
Brent crude futures tumbled by 10.46% to $88.48 per barrel, while Murban oil futures were down 11.09% to $90.38/bbl.
"Oil has eased as hopes for renewed US-Iran talks and the Israel-Lebanon ceasefire have reduced some of the immediate panic premium," Saxo Bank strategists said.
Iran's Foreign Minister Abbas Araghchi said on Friday that the Hormuz "is declared completely open," even as a US naval blockade continues to constrain flows through the strategic waterway.
"In line with the ceasefire in Lebanon, the passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of the ceasefire," Araghchi said in the surprise announcement on X.
Israel and Lebanon also agreed to a 10-day ceasefire on Thursday, a move that is expected to ease regional tensions.
Araghchi said vessels traveling through the Strait must sail a "coordinated route" prescribed by Iran's maritime authorities.
President Trump also said on Friday that Iran had agreed never to close the Hormuz again, but in a separate social media post, he reiterated that a US naval blockade of Iran's ports will remain in "full force" until the US reaches a deal with Iran.
However, an Iranian Supreme National Security Council official reportedly said that vessels transiting the Strait will require permission from the Islamic Revolution Guards Corps.
The remarks from the two officials stoked optimism that there may be an end in sight to the Middle East conflict, which led to the worst global energy supply disruption in recent history.
Meanwhile, Trump said Iran agreed to suspend its nuclear program indefinitely and will not receive any frozen funds from the US.
"There is little public evidence yet that the US has made concessions, and no explicit mention of concessions coming from Iran's officials," Macquarie strategists said in a note on Friday, noting that traders have been obligated to take Trump at his word.
The Middle East conflict has caused unprecedented disruption to global energy markets amid the double blockade of the Hormuz, a critical energy chokepoint that typically carries about 20% of the world's oil and liquefied natural gas flows.