Reopening of the Strait of Hormuz causes oil prices to plummet

BarcelonaAfter Iran announced the reopening of the Strait of Hormuz, oil and gas prices have plummeted in the markets. Specifically, on Friday afternoon, the price of a barrel of Brent crude oil – the benchmark in Europe – fell by more than 10% and stood at around $89. Futures for West Texas Intermediate (WTI) crude—the benchmark in the United States—stood at around $83, almost 12% less than on Thursday. At some points during the conflict, the price of a barrel of Brent had touched $120. Despite Friday's drop, the price of oil remains above the $72 it stood at just before the attack by the United States and Israel on Iran.

For its part, natural gas futures on the TTF market, the benchmark in Europe, fell by more than 7% and stood at around 39 euros per megawatt-hour, also falling by 8.26% to 38.92 euros. Its peak during the conflict was reached on March 19, when the price stood at 61.8 euros.

As for the markets, after the stock exchanges opened the day with slight falls, following Iran's announcement to reopen the Strait of Hormuz, they turned to positive territory, with rises of around 2%. Specifically, the Ibex-35 closed by touching its historic highs. The Spanish stock market indicator rose by 2.18% this Friday. The Spanish selective index closed the session at 18,484.5 points, after gaining 395 points. Since the beginning of the year, and despite the impact of the war, the index has gained 6.8%.

This same optimism was replicated in the rest of the European markets, led by the German DAX, which rose by 2.27%, and accompanied by Paris (1.97%), Milan (1.75%), and London (0.73%). The 50 most important European companies (Euro Stoxx50) collectively rose by 2.1%.

In the foreign exchange market, the euro strengthened by 0.21% and remains above $1.18, at 1.1805, after rising to $1.1849 during the morning. On the other side of the Atlantic, on Wall Street, its main index, the Dow Jones, was up 1.96% at the close of European markets, followed by the Nasdaq (1.59%) and the S&P500 (1.21%).

Euphoria in the commodity and stock markets has erupted as Iranian Foreign Minister Abbas Araghchi announced that the Strait of Hormuz will remain "totally open" until the end of the ceasefire with the United States, next Wednesday, as a result of the beginning of the truce in Lebanon. Despite this announcement, the President of the United States, Donald Trump, has said that his country will maintain the naval blockade on Iran until an agreement is reached.

Although oil has not returned to pre-war levels, the euro has. The single currency has recovered to pre-war levels with a revaluation of 0.27% in one day. Thus, the exchange rate regained the threshold of 1.18 dollars, a figure not seen since February 27, the day before the war began. Since the start of the war in the Middle East, the US dollar had appreciated strongly, reaching an exchange rate of 1.1411 dollars per euro on March 13, representing an adjustment of close to 3.3% in two weeks of conflict.

During the conflict, the dollar has behaved as the main safe-haven asset, which has boosted its appreciation against the euro by increasing global demand. This movement contrasts with that of other assets traditionally considered safe havens, such as gold, which, after rising in the early days of the war, later corrected by around 20%, falling from $5,170 per ounce the day before the confrontation began to $4,100, which it marked as a low on March 23.

As specialized analysts have repeatedly explained, this fall is largely due to the close link between gold and the dollar: when the US dollar appreciates, the precious metal becomes relatively more expensive for investors operating in other currencies, which reduces its international demand and puts downward pressure on prices. In this way, the US dollar has concentrated a good part of investment flows in a context of high geopolitical uncertainty, and as confirmed by the economic advisor of Ossiam –a subsidiary of Natixis Investment Managers–, Patrick Artus, "only the dollar is acting –and has acted– as a safe-haven asset".

In fact, after it was announced that the Strait of Hormuz blockade would be lifted, the price of gold and silver have resumed their upward trend and were recovering levels from a month ago. The price of an ounce of gold was up 1.71%, to $4,888, shortly after the news broke, while silver surpassed $82.11, advancing 4.37%. It should be noted that both precious metals lost 6.75% and 11.75% of their value, respectively, since the start of the conflict in the Middle East. Despite everything, they accumulate a year-on-year increase of 46% and 149%. In the case of gold, its peak was $5,626.80 recorded on January 29, 2026, while the highest point for silver was $121.78 achieved during the same trading session.

The IMF recommends aid to the vulnerable

Despite the drop in the price of oil this Friday, the price remains high and it will take time, if the opening of the Strait of Hormuz is confirmed, to be noticed in the pockets of citizens. The International Monetary Fund (IMF) has indicated that aid packages to compensate families for the extra costs due to high energy prices would have a lesser impact on the financial stability of countries if they were directed at those with lower incomes, thus avoiding putting national finances at risk.

Alfred Kammer, the IMF's director for the Old Continent, has recommended that measures have "specific support and defined timelines" as the "temptation" to curb price increases with measures such as tax cuts, universal aid, or price caps are "ill-advised" actions.

"During the 2022 crisis, European governments spent an average of 2.5% of GDP on energy support packages – more than two-thirds – without a specific objective. An IMF analysis shows that fully compensating the 40% of lower-income households for the total increase in energy costs would only have required 0.9% of GDP," Kammer argued.