Brent declined towards $79 a barrel, declining over 9% this week. Meanwhile, the West Texas Intermediate for August was close to $75 a barrel.
Ships carrying stranded oil began making their way out of the waterway on Thursday, while Kuwait said it will start ramping up production.
US Central Command said that it had lifted its blockade on traffic to and from Iranian ports and coastal areas, while the Joint Maritime Information Center, a key naval information body, advised ships seeking to pass through the waterway to use a route near the Oman coastline to try and avoid mines.
US President Donald Trump hailed the developments, pushing back against criticism from Iran hawks, including some allies, that the deal conceded too much to Tehran. “The Markets are loving what is happening with Oil Prices way down, and Stocks way up,” Trump posted on social media.
Crude’s selloff means that futures have given back almost all of the gains triggered by the war, which erupted in February when the US and Israel attacked Iran over its nuclear program. The strait — which connects the Persian Gulf to global markets and normally carried about a fifth of global oil supply — had been subject to a double blockade by both Tehran and the US.
Vice President JD Vance downplayed concerns Iran could eventually impose tolls on traffic through the strait, a move that could turn the chokepoint into a money maker for Tehran. He also said a 60-day clock for working out the contentious details in the memorandum of understanding had started ticking.
While crude prices have sunk, a full reopening of Hormuz may prove to be a tricky and drawn-out operation. To run smoothly, the process needs to be choreographed, with ships in the right place, wells restarted, infrastructure repaired and agreement on a de-mining operation. Some shipowners remain cautious about conditions in the waterway and the Persian Gulf.
With inputs from Bloomberg
