Oil prices plunge on claims Strait of Hormuz is open

Data: Financial Modeling Prep; Chart: Ben Geman/AxiosOil prices dropped over 10% Friday after President Trump and Iran's foreign minister claimed the Strait of Hormuz — the world's most critical energy shipping lane — is open for transit.Why it matters: The steep selloff signals traders see a real sign that the unprecedented throttling of oil and petroleum product flows could significantly ease.The drop also follows signs of continued progress in ceasefire negotiations.Driving the news: "In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire," Iranian foreign minister Abbas Araghchi posted on X.He said this would occur "on the coordinated route as already announced by Ports and Maritime Organisation of the Islamic Rep. of Iran.""IRAN HAS JUST ANNOUNCED THAT THE STRAIT OF IRAN IS FULLY OPEN AND READY FOR FULL PASSAGE. THANK YOU!," Trump posted on Truth Social.The big picture: The global benchmark Brent crude is down to $88.90 per barrel, the lowest in over a month.WTI, the main U.S. reference, is at $83.35.U.S. stock futures — already in positive territory before the announcement — moved higher on the news.What we're watching: It's unclear how many shippers will feel the claims provide enough certainty to start resuming transit through the narrow waterway, which handles about a fourth of the world's seaborne oil trade.