Oil prices fell by 10 per cent to $89 on Friday following Iran’s announcement to reopen the Strait of Hormuz.

Iran reopened the narrow passageway that transports 20 per cent of the global oil supply, after Israel and Lebanon agreed to a 10-day ceasefire. 

Tehran had mandated a truce between Israel and Lebanon as part of the conditions for opening the strait.

“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 ceasefire,” Abbas Araghchi, Iran’s foreign minister, posted on X Friday.

U.S. President Donald Trump acknowledged Tehran’s statement shortly in a post on Truth Social.

“Iran has just announced that the Strait of Hormuz is fully open and ready for full passage. Thank you,” Mr Trump posted.

Tehran, however, included a clause that commercial vessels seeking to cross the Strait of Hormuz must use prescribed routes, leaving the fate of vessels that do not follow designated routes uncertain.

The Islamic Republic closed the Strait to the public since February 28 after the U.S. assassinated its supreme leader Ali Khamenei, and attacked other senior officials who had gathered for a meeting.

Mr Trump hinted that talks for a resolution might resume this week in Pakistan after a previous meeting in Islamabad ended in a stalemate.