Oil falls by over 11% after Iran FM declares Strait of Hormuz open

Brent fell $11.12 to $88.27; WTI dropped $11.40 to $83.29 amid sharp declines in oil prices

Oil prices plunged by about 11% on Friday, extending earlier losses, after Iran's foreign minister said that passage for all commercial vessels through the Strait of ‌Hormuz was open for the remaining ceasefire period.

Brent crude futures were $10.59, or 10.7%, lower at $88.80 a barrel at 1340 GMT, after falling to a session low of $87.71. US West Texas ​Intermediate crude futures were down $10.80, or 11.4%, at $83.89 a barrel, after ​touching $83. Both contracts were trading at their lowest since March ⁠11.

"Comments from Iran's foreign minister indicate ​a de-escalation as long as the ceasefire is in place, now we need to see also if the number of tankers ​crossing the Strait increases substantially," UBS analyst Giovanni Staunovo ​said.

Read More: Iran FM announces Hormuz's opening for all commercial vessels till ceasefire's remaining duration

Prices were already down earlier in the session as possible further talks ‌between ⁠the US and Iran at the weekend in Pakistan and a 10-day ceasefire between Lebanon and Israel raised investors' hopes that the war in the Middle East could be nearing an ​end.

Addressing a sticking point in talks, United States ‌President ⁠Donald Trump said Tehran had offered not to possess nuclear weapons for more than 20 years.

"We're going to see what happens. But I think we're very close to making a deal with Iran," Trump told reporters outside the ​White House on Thursday.

A ​US official told Reuters ⁠shortly after the announcement that the strait was open that a military blockade of Iran involving more than 10,000 ​personnel remains in effect.

While the opening up of the strait ​was a ⁠step in the right direction, the European market would remain tight for a while, analyst Ole Hvalbye at SEB Research said, since it takes roughly 21 ⁠days for ​ships to move from the Gulf to ​Rotterdam, the main crude port in the region.