Oil drops 10% as Iran says Hormuz passage open during ceasefire

Oil prices plunged Friday after Iran's Foreign Minister Abbas Araghchi said the vital Strait of Hormuz was "completely open" for commercial tankers and cargo ships during the US-Iran ceasefire.

International benchmark Brent North Sea crude plunged 10 percent to $89.11 a barrel, after earlier falling five percent on US-Iran peace deal hopes.

The main US contract, West Texas Intermediate, shed 11 percent to $84.11 a barrel.

Stock markets diverged, and oil prices fell on Friday as investors awaited news of a possible extension of the Iran-US ceasefire, with the first passage of Iranian oil shipments through the Strait of Hormuz in weeks bolstering hopes.

Several indices reached record highs this week, including the S&P 500 and the Nasdaq in New York on Thursday, on signs the Middle East war could be nearing an end as US President Donald Trump said negotiators were close to a deal.

But worries abound that a shaky truce agreed earlier this month -- and which ends next week -- could fall apart and spark a fresh market rout.

Oil prices tumbled on hopes of Gulf supply resuming, with the international benchmark Brent down 3.0 percent to $96.42 a barrel.

After Asian stock markets mostly closed lower, the Paris and Frankfurt markets advanced in European midday deals while London dipped.

Trump on Thursday said that Iran had agreed to hand over its store of enriched uranium and that the two sides were "close" to a peace deal ending six weeks of conflict.

But Iran has given no public indication it would surrender its stockpile.

The White House has said it is discussing a possible second round of talks with Iran in the Pakistani capital, Islamabad, after a first round last weekend failed to produce a deal.

Hopes were also lifted after a 10-day ceasefire agreed between neighbouring states Israel and Lebanon took effect at 2100 GMT Thursday.