Iran said it would open the Strait of Hormuz for the duration of a 10-day ceasefire between Israel and Hezbollah in Lebanon, increasing the prospect of an agreement to end the wider war in the Middle East.

The critical waterway for global energy supplies, which has been effectively shut since the U.S. and Israel starting bombing Iran at the end of February, is now “completely open” for commercial shipping, Iran’s Foreign Minister Abbas Araghchi said in a post on X on April 17, citing the Lebanon truce as the reason.  

Oil prices plunged on the surprise announcement, with global benchmark Brent crude declining more than 10% to $89 a barrel, as expectations rose of an ease to global supply shortages.

Araghchi’s comments came after Israel and Iran-backed Hezbollah looked on April 17 to be observing a truce announced by U.S. President Donald Trump the previous evening. Their ongoing conflict had been complicating efforts by Washington and Tehran to agree to an extension to their own ceasefire beyond its official expiry date next week. 

Hormuz is “open and ready for business,” Trump said on Truth Social on April 17, after the Iranian announcement. However, a U.S. naval blockade on the strait — designed to stop Iran from shipping oil to global markets — would remain in place until a broader agreement is reached, he said.  

“Most of the points are already negotiated,” he added. 

Trump on said on April 16 that Iran had made key concessions in a negotiation to end the war, saying it may not be necessary to renew the two-week truce that started April 7.

Iran has yet to comment on Trump’s claims that Tehran has ceded ground — including over the key issue of its nuclear program — though the Hormuz announcement is an indication of improved relations between the sides.

Trump reiterated that the Islamic Republic “will not have nuclear weapons,” and pushed back against suggestions that a fixed-term moratorium on uranium enrichment is up for negotiation. 

The two sides are negotiating a three-page plan to end the war, Axios reported, with one aspect being that the U.S. would release $20 billion in frozen Iranian funds in return for Tehran giving up its stockpile of enriched uranium. Axios cited to two U.S. officials and two additional sources briefed on the talks that it didn’t identify.

Trump said the U.S. is pursuing Iran’s uranium but “no money will exchange hands in any way, shape, or form.”

Trump’s predictions of a quick end to the war have been a regular fixture of the conflict, which has killed thousands and triggered a surge in energy prices, but April 17’s more substantial developments are reinforcing optimism in global markets.

The S&P 500 rose 0.8% on the Hormuz announcement after notching back-to-back record highs, while the dollar lost ground against all major peers.

Israel and Lebanon’s ceasefire was agreed after the issue frustrated an initial round of talks in Pakistan last weekend. While the initial deal announcement didn’t mention Hezbollah, the militant group stopped launching rockets into Israel overnight and supporters celebrated by firing guns in Beirut. 

Israeli Prime Minister Benjamin Netanyahu confirmed the agreement, calling it a step toward a broader peace, and Trump said U.S. officials would work with both sides to secure a lasting deal. 

Israel had been fighting Hezbollah in southern Lebanon since just after the start of the U.S.-Israeli bombing of Iran on February 28. The Israeli military has occupied large parts of southern Lebanon as part of the campaign, which Lebanese authorities say has killed more 2,000 people and displaced a million more.

Trump said he spoke with his Lebanese counterpart, Joseph Aoun, and Netanyahu before declaring the ceasefire. In a subsequent social media post, Trump said he would invite both leaders to the White House for talks.

Any U.S.-Iran ceasefire would have to include a longer-term solution for Hormuz, through which about a fifth of the world’s oil and liquefied natural gas flowed before the conflict. The block on the waterway has elevated prices and stoked fears of a global slowdown and inflation crisis.

The U.S. imposed its own blockade on April 13, while Iran has repeatedly said it wants to maintain control of the strait in the longer term, and is working on legislation to charge tolls. 

The U.K. and France will host a summit with about 40 nations to discuss a multinational naval force to secure Hormuz, though deployment remains unlikely until a broader agreement is reached. 

Pakistan’s army chief, Asim Munir, traveled to Iran this week as his nation mediates between Washington and Tehran. 

Trump said Thursday that he “might” travel to Pakistan if a deal with Iran is clinched.

“They’ve agreed to almost everything,” Trump said. “They got to get to the table with a pen.”