Hormuz Strait Tensions Drive Oil Prices Higher
Oil prices rose on Friday as concerns over supply disruptions in the Strait of Hormuz intensified. Brent crude futures climbed 99 cents, or 1.2%, to $83.48 per barrel by 0010 GMT.
The increase followed Thursday's sharp rise of more than $3 per barrel after Iran reviewed legislation to block U.S. and Israeli vessels from the strategic waterway.
Iran, in coordination with Oman, proposed new rules that would ban vessels considered hostile from using the Strait of Hormuz and impose heavy fines on violators. The proposed bill would prohibit ships from countries deemed hostile and fine violators up to 20% of the value of their cargo, according to Iran's Fars News Agency.
Industry sources questioned the plan's feasibility, citing U.S. sanctions and insurance restrictions that would make the proposed payment system difficult to implement.