Iran announces normal passage through the Strait of Hormuz, international oil prices plummet

The Iranian Islamic Revolutionary Guard Corps Navy announced on May 6th local time that the security threats to the Strait of Hormuz have been lifted, and a new passage procedure has officially come into effect to ensure the safety and stability of passing ships in these waters.

The notice also thanked the captains and ship owners in the Persian Gulf and Oman Bay areas for adhering to the relevant regulations and maintaining regional maritime security during the previous tense situation.

Market participants interpreted this statement as a clear indication of a significant decrease in Middle Eastern geopolitical risks. As the most critical oil transportation chokepoint in the world, the Strait of Hormuz carries about one-fifth of the global crude oil transit, and disputes around its passage have continuously driven up the risk premium in the energy market.

Earlier media reports indicated that the US and Iran were close to reaching a ceasefire memorandum, with key terms in nuclear negotiations showing signs of easing.

Impacted by this news, international oil prices plummeted during trading. Brent crude oil broke below the $97 per barrel threshold, reporting $96.86 per barrel; WTI crude oil's intraday drop reached 13.0%, reporting $88.82 per barrel, marking the largest single-day decline in recent times.