Crude oil drops 13% after Strait of Hormuz route reopens:Price falls from $99.39 to $86 per barrel; US stock markets rise 2%

After Iran announced the complete opening of the Hormuz route for commercial ships, crude oil became 13% cheaper. On Friday, April 17, prices fell by about $13 to $86 per barrel. A day earlier, crude oil was priced at $99.39 per barrel. Before the war began on February 28, crude oil was $73 per barrel. During the war, prices rose to $120 per barrel on March 9. Since then, there have been apprehensions of petrol-diesel prices increasing. According to experts, with oil becoming cheaper, these apprehensions have also ended. America’s Dow Jones rose by about 1,000 points The fall in crude oil prices is causing a major stir in the global market. America’s Dow Jones is trading at the level of 49,500 with a gain of about 1,000 points. The SP 500 is seeing a rise of 1.12% and the Nasdaq Index is up by 1.04%. Iran’s Foreign Minister announced the opening of Hormuz Iran’s Foreign Minister Sayed Abbas Araghchi informed on social media platform X that in view of the ceasefire between Israel and Lebanon, the Hormuz route has been fully opened for all commercial ships. Investors’ confidence has increased with the hope of reduced tension in the Middle East. Trump posted on Truth Social and wrote, Iran has agreed never to close the Strait of Hormuz again. Now it will not be used as a weapon against the world. What benefits will India get from cheaper crude oil? Crude oil is essential for India, as we import about 85% of our oil. When oil prices fall, the economy gets relief on many fronts. According to experts, if crude oil becomes $10 cheaper, the current account deficit could decrease by $9-10 billion and inflation could see a relief of about 0.5%. World was grappling with oil supply disruptions According to ING’s analysis, due to the war, approximately 13 million barrels of oil supply were being affected daily in the market. Although alternative pipeline routes were used, supply pressure remained. Now, with the opening of this waterway, it is expected that stability will return to the global economy and energy market. Trump’s statement sparked hope for peace US President Donald Trump said on Thursday that the Iran war should end soon. At an event in Las Vegas, he spoke of the conflict moving in a positive direction and said that Tehran is very eager to make a ‘deal’. According to Trump, a 10-day ceasefire has begun between Israel and Lebanon, and the leaders of both countries may soon be invited to the White House. Oil became expensive due to impact on Hormuz After the war, Iran had almost closed the Hormuz route. About 20% of the world’s oil and gas passes through this route. Its closure made crude oil, LPG, aluminum, fertilizers, and plastics expensive. The risk of a shortage of medicines and essential goods increased in Britain and Europe, as shipping costs had multiplied. Due to this supply crisis, gas prices in America had reached $4.15 per gallon, and the inflation rate also surged. Crude oil became 60% more expensive in March Crude oil saw a 60% surge in March. This was the biggest increase in a month since the 1990 Gulf War. It had risen from $72.48 at the end of February to over $120 in March. Earlier, in September 1990, when Saddam Hussein attacked Kuwait, oil prices had risen by 46% in a month. 51% of India’s total oil imports come from Gulf countries India is most dependent on West Asia for crude oil. In the first 10 months of FY2025-26, this region accounted for 51% of total imports. The import bill was rapidly increasing due to rising prices.