Children gestured from a vehicle Friday near Tyre, Lebanon, as displaced people made their way back to their homes after a 10-day cease-fire between Lebanon and Israel took effect. Aziz Taher/Reuters
A top Iranian official raised hopes of a breakthrough in the standoff between Washington and Tehran when he said the Strait of Hormuz is "completely open," while President Trump said a U.S. naval blockade on Iranian ports would remain in force, stirring uncertainty among shippers in the region.
Oil prices plunged and stocks rose after the Iran official's declaration. Brent crude futures fell 9.1% to $90.38 a barrel, while the U.S. benchmark declined 11% to $83.85 a barrel. The S&P 500 and Nasdaq composite indexes finished at fresh records.
Trump later said on social media, after initially repeating Iran's announcement about the opened strait, that the U.S.'s blockade of Iranian ports would remain in place until "OUR TRANSACTION WITH IRAN IS 100% COMPLETE." He didn't specify what that transaction entails but said it should "go very quickly" because most points have been negotiated.
Trump's announcement suggested the economic pressure will remain in full effect until Iran agrees to a list of U.S. demands involving its nuclear program and missile and drone stockpile. On Thursday, the U.S. announced an expansion of its crackdown on commercial ships linked to Iran and said it would also go after tankers carrying Iranian oil.
The announcement by Foreign Minister Abbas Araghchi of Iran that the Hormuz Strait, through which about 20% of the world's oil flows, is open appeared to be an effort to signal a compromise at a critical moment for diplomacy. The comments came as a newly struck cease-fire between Israel and Lebanon appeared to be holding on its first day. The 10-day truce began early Friday local time after weeks of fighting between the Israeli military and the Iran-backed Lebanese militant group Hezbollah.
"Araghchi's statement appears more aimed at unlocking negotiations than unblocking the Strait of Hormuz," said Michael Singh, former senior director for Middle East affairs at the National Security Council.
An Iranian diplomat and another person familiar with the talks agreed Araghchi was aiming to deliver a confidence-building measure to generate good will ahead of possible talks.
Talks between the U.S. and Iran haven't officially been scheduled, but a senior Trump administration official said they are likely to take place on Monday in Pakistan. Vice President JD Vance is expected to lead the negotiations again, alongside Trump's Middle East peace envoy Steve Witkoff and Jared Kushner, the president's son-in-law.
Key questions remain over the mechanics of a final deal. In addition to sorting out the future of the Strait of Hormuz and Iran's stockpile of highly enriched uranium, the two sides need to work out their dispute over Iran's ability to enrich uranium in the future.
Trump said Friday the U.S. would get its hands on Iran's stockpile of enriched uranium, though he didn't say how.
The signaling comes with four days left before Trump's two-week cease-fire runs out.
If Iran's declaration about Hormuz is enough for Washington to say progress on opening the waterway is being made, and if a solution to Iran's stockpile of highly enriched uranium is within reach, there could be a path to a basic, framework agreement between U.S. and Iran that would allow the cease-fire and talks to continue.
Soon after the foreign minister's announcement about the strait, Iranian media outlets aligned with the Islamic Revolutionary Guard Corps paramilitary group began to roll back the opening. The semiofficial publication Tasnim said Iran's armed forces would supervise ship movements and would keep the waterway closed if the U.S. blockade continued. Javan, the main Revolutionary Guard newspaper, said military vessels or those linked to Iran's enemies wouldn't be allowed through.
On Friday, commodities-data agency Kpler said the Hormuz Strait "remains effectively closed" despite Iran's announcement. Most shipping organizations said the waterway remains too unsafe to cross because of mines, while Iran’s military has said it would block any vessel it doesn’t authorize.
Meanwhile President Emmanuel Macron of France welcomed the cease-fire between Israel and Lebanon and the announcement of the strait’s reopening, but said the developments “must be viewed with caution.”
“All of this is a step in the right direction,” he said after an online meeting of about 50 countries to set up an international mission that could escort ships through the strait once the fighting is over.