Oil prices plunged more than 10 percent on Friday after Iran said the Strait of Hormuz would be "completely open" for the rest of the ceasefire with the United States, and stock markets surged.

Iran's Foreign Minister Abbas Araghchi said on X that "passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire".

The strategic waterway, through which one-fifth of the world's crude oil normally flows, has been disrupted by Iran since the US-Israeli offensive began, sending oil prices to a peak of nearly US$120 a barrel and threatening to disrupt the global economy.

Both the benchmark international contract Brent and its US equivalent WTI fell below US$90 per barrel.

Wall Street's main stock indices jumped at the opening bell, with both the S&P 500 and the Nasdaq Composite building on record highs struck the previous evening.

"This news is having an immediate impact on markets," said Kathleen Brooks, research director at XTB.

"This is the biggest development so far during the ceasefire, and it gives hope that the war will end soon, and supply chains will return to some normality."

It was not clear whether Araghchi was speaking of the 10-day truce agreed by Lebanon and Israel that went into effect at midnight or an earlier two-week truce between Iran and the United States that began on April 8.

But Araghchi's declaration bolstered hopes for further peace talks and a renewal of the the ceasefire, despite US President Donald Trump saying that the US blockade of Iran's ports remains in force. (AFP)


Edited by Priscilla Ng