Oil prices edged higher on Friday on further concerns surrounding the reopening of the Strait of Hormuz and potential Iranian bans and fines on vessels it deems hostile or in violation of proposed rules.
Brent crude futures were up 0.9% at $83.24 a barrel in early morning trade. US West Texas Intermediate futures rose 0.5% to $77.71.
Iran’s stance on Strait of Hormuz transit
Oil futures settled more than $3 a barrel higher on Thursday as Iran reviewed a bill to ban US and Israeli vessels from the Strait of Hormuz, through which roughly a fifth of the world’s oil and liquefied natural gas normally passed before the war began at the end of February.
Prices fell earlier in the week as a possible solution to the conflict looked more likely, and both benchmarks were on course for a weekly loss of about 8%.
Analysts said that this week’s developments have signalled that hostilities between Iran and the US are not yet over.
Oil prices are reacting to Iran’s published draft plan for Hormuz transit conditions, said Rystad Energy analyst Lin Ye.
Broader geopolitical and economic factors
“That’s not the market pricing in a bad deal, it’s pricing in confirmation that whatever emerges is a managed/conditional corridor, not a restoration of normal flow,” Ye added.
Iran is seeking fees of between 5% and 7% of the price of cargoes from ships using the strait, a senior Iranian official said. Oman, meanwhile, is discussing fees of about 3% while Washington wants no fees at all.
Four industry sources have said the proposed deal is not easily workable because of US sanctions and restrictive insurance clauses on any payments.
While this week’s signals on a potential deal have driven a roller-coaster ride in market sentiment, the market remains in the dark as to what needs to happen for the agreement to be clinched, said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Meanwhile, Yemen’s Houthis said they carried out missile and drone attacks on Saudi deployments in Marib and Hadramout in Yemen on Thursday.
US President Donald Trump told reporters on Thursday that he believed that the war would be over soon.
Investors are awaiting US payrolls data later on Friday, which could offer a steer on US Federal Reserve’s thinking on interest rates. Higher interest rates raise consumer costs, which can reduce economic growth and demand for oil.
- Brent crude futures rose 0.9% to $83.24 a barrel and US West Texas Intermediate futures increased 0.5% to $77.71 on Friday morning amid concerns over the Strait of Hormuz reopening and Iranian transit rules.
- Iran is reviewing a bill to ban US and Israeli vessels from the Strait of Hormuz and is seeking a fee of 5% to 7% of cargo prices for ships using the strait.
- Oman is proposing fees of about 3%, while the US opposes any fees for transit through the strait.
- Four industry sources indicated that a deal on Strait of Hormuz transit is complicated by US sanctions and insurance restrictions on payments.
- Yemen's Houthis conducted missile and drone attacks on Saudi deployments in Marib and Hadramout, adding to regional tensions.
Oil prices edged higher on Friday on further concerns surrounding the reopening of the Strait of Hormuz and potential Iranian bans and fines on vessels it deems hostile or in violation of proposed rules.
Brent crude futures were up 0.9% at $83.24 a barrel in early morning trade. US West Texas Intermediate futures rose 0.5% to $77.71.
Oil futures settled more than $3 a barrel higher on
Prices fell earlier in the week as a possible solution to the conflict looked more likely, and both benchmarks were on course for a weekly loss of about 8%.
Analysts said that this week's developments have signalled that hostilities between Iran and the US are not yet over.
Oil prices are reacting to Iran's published draft plan for Hormuz transit conditions, said Rystad Energy analyst Lin Ye.
"
Iran is seeking fees of between 5% and 7% of the price of cargoes from ships using the strait, a senior Iranian official said. Oman, meanwhile, is discussing fees of about 3% while
Four industry sources have said the proposed deal is not easily workable because of US sanctions and restrictive insurance clauses on any payments.
While this week's signals on a potential deal have driven a roller-coaster ride in market sentiment, the market remains in the dark as to what needs to happen for the agreement to be clinched, said
Meanwhile, Yemen's
US President Donald Trump told reporters on
Investors are awaiting US payrolls data later on Friday, which could offer a steer on US Federal Reserve's thinking on interest rates. Higher interest rates raise consumer costs, which can reduce economic growth and demand for oil.
