Oil prices drop as Strait of Hormuz reopens

Global oil prices dropped sharply after a conditional ceasefire agreement allowed the reopening of the Strait of Hormuz, an important route for oil shipments around the world.

Brent crude price fell by about 13% to $94.80 per barrel. At the same time, US-traded oil dropped more than 15% to $95.75 per barrel. However, prices are still higher than before the conflict. On February 28, Brent crude was around $70 per barrel before tensions in the region disrupted supply.

Supply Disruptions Ease Slightly
Earlier, oil and gas supplies from the Middle East were badly affected due to threats to ships passing through the Strait of Hormuz. This caused global energy prices to rise sharply.

Now, with the ceasefire in place, stranded oil tankers are expected to move through the route again. This may provide short-term relief to global markets. Countries like India, Malaysia, and the Philippines have arranged safe passage for their ships, while China has confirmed that several of its vessels have already crossed the strait.

Energy Infrastructure Still Damaged
Despite the price drop, energy production in the Middle East is still limited. Experts say full recovery will take time and depends on lasting peace and major repairs.

Iranian strikes damaged important energy facilities, including Qatar’s Ras Laffan hub. This reduced liquefied natural gas (LNG) export capacity by 17%.

According to estimates, repairs at the facility could take up to five years. This means supply shortages may continue, and global energy markets could remain under pressure even after the temporary ceasefire.