Global oil prices fell sharply on Friday after Abbas Araghchi announced that the Strait of Hormuz would remain fully open for the duration of the current ceasefire with the United States.

In a statement shared on social media, Araghchi said the vital waterway was “completely open,” signalling a temporary easing of tensions that had disrupted global energy flows in recent weeks. The announcement triggered an immediate reaction across financial markets, with oil benchmarks dropping by more than 10% in under two hours.

At one point during trading, US crude, known as West Texas Intermediate, fell over 12% to around $82 per barrel, while Brent crude declined roughly 10% to near $88. The steep fall reflects renewed confidence that oil shipments from the Gulf could resume, easing supply concerns that had pushed prices higher during the conflict.

The Strait of Hormuz is one of the world’s most critical energy corridors, handling a significant share of global oil and gas shipments. Any disruption to traffic through the narrow passage has a direct impact on international markets, making Friday’s announcement particularly significant.

Donald Trump welcomed the development, describing it as a positive step while maintaining that the US naval blockade of Iranian ports would remain in place until negotiations are finalised. He said progress had already been made in talks with Tehran and suggested that a broader agreement could be reached soon, though no specific details have been disclosed.

The news also lifted investor sentiment, with major US stock indices rallying in early trading. The S&P 500 and the Nasdaq Composite both climbed more than 1%, reaching record highs, while the Dow Jones Industrial Average rose by over 1.7%.

Market analysts said the sharp drop in oil prices reflects expectations that supply constraints may ease if the ceasefire holds and shipping activity resumes at scale. However, uncertainty remains over how quickly normal traffic levels can be restored through the strait.

The broader outlook now hinges on the progress of ongoing diplomatic efforts. Investors are increasingly betting that a more lasting resolution to the conflict could be reached before the end of the month, though risks remain if negotiations stall or tensions flare again.

With markets heading into the weekend, traders have limited time to fully assess the implications of the announcement, leaving room for further volatility as new developments emerge.

Taiwan-based semiconductor giant Taiwan Semiconductor Manufacturing Company reported a fourth consecutive quarter of record profits on Thursday, driven by strong global demand for artificial intelligence chips and steady orders from major technology clients.

The world’s largest contract chipmaker said first-quarter net profit jumped 58.3 percent year-on-year to NT$572.48 billion ($18.11 billion), surpassing analyst expectations. Revenue also rose sharply, climbing 35.1 percent to NT$1.13 trillion, reflecting continued growth in advanced chip manufacturing.

Company chairman and chief executive C. C. Wei said demand linked to artificial intelligence remained a key driver of performance. He noted that orders for high-end chips used in AI systems continue to grow at a rapid pace, supporting both revenue and profitability.

TSMC’s margins remained strong during the quarter, with gross margin reaching 66.2 percent and net profit margin standing at 50.5 percent. Advanced technologies, defined as chips built on 7-nanometre processes and below, accounted for nearly three-quarters of total wafer revenue.

The company’s customer base includes leading global firms such as Apple and Nvidia, both of which have increased their reliance on high-performance chips to power devices and AI applications.

Chief financial officer Wendell Huang said strong demand for cutting-edge manufacturing processes had supported first-quarter results and is expected to continue into the next quarter. TSMC forecast second-quarter revenue between $39 billion and $40.2 billion, up from $35.9 billion in the first quarter.

Analysts say the continued expansion of AI infrastructure is helping offset potential weakness in other areas, including consumer electronics. Ben Barringer of Quilter Cheviot noted that while high memory prices could dampen demand for some devices, the surge in AI-related spending is likely to sustain growth.

Despite the positive outlook, TSMC flagged potential risks linked to geopolitical tensions. The company warned that rising costs for key materials, including chemicals and industrial gases, could affect profitability in the coming months. Wei said it was too early to determine the full financial impact.

TSMC added that it does not expect immediate disruption to its operations, citing a diversified supply chain and sufficient inventory of essential materials such as helium and hydrogen. The company has also been working to expand its supplier network to improve resilience against future shocks.

With demand for advanced chips continuing to rise, TSMC remains central to the global semiconductor industry, even as it navigates cost pressures and an increasingly complex geopolitical environment.