Oil prices climb on fresh Strait of Hormuz worries
Oil prices moved higher on Friday as fresh concerns emerged over the possible reopening of the Strait of Hormuz. Brent crude futures gained 80 cents, or 0.97 percent, to reach $83.29 a barrel. US West Texas Intermediate futures also rose 64 cents, or 0.83 percent, to $77.93.
The latest gains came after Iran, working with Oman, floated plans that could restrict access through the vital waterway. An Iranian lawmaker confirmed that a parliamentary committee is reviewing a preliminary bill. The draft would ban vessels from the United States, Israel, and other countries viewed as hostile. Ships that violate the rules could face fines of up to 20 percent of their cargo value.
Iran is also seeking transit fees of between 5 percent and 7 percent of the cargo price for ships using the strait. Oman has discussed fees closer to 3 percent, while Washington continues to push for zero fees. Industry sources noted that any deal faces serious hurdles because of existing US sanctions and insurance restrictions that make payments difficult.
Roughly one fifth of the world’s oil and liquefied natural gas normally passes through the Strait of Hormuz. Market analysts said the latest Iranian proposals show that full normal traffic is unlikely to return soon. Lin Ye, vice president of commodities market oil at Rystad Energy, explained that prices are reacting to Iran’s published draft plan. The market is pricing in a managed and conditional corridor rather than a complete return to free passage.
Vandana Hari, founder of Vanda Insights, described the week as a roller-coaster for sentiment. Signals of a possible Iran-Oman transit deal lifted hopes earlier, but uncertainty remains high about what is still needed to finalize any agreement.
Prices had jumped more than three dollars a barrel on Thursday after Iran began reviewing the vessel ban. Earlier in the week oil had fallen when a broader resolution looked more likely. Both benchmarks were still on track for a weekly loss of around 8 percent.
In related developments, Yemen’s Houthis claimed missile and drone attacks on Saudi positions in Marib and Hadramout. US President Donald Trump told reporters he believed the wider conflict would end soon. For now, traders remain focused on the Strait of Hormuz and the conditions Iran wants to impose on shipping.
