Oil Prices Fall as Gulf States and Iran Weigh Deal on Strait of Hormuz

Oil prices have been affected by ongoing tensions in the Strait of Hormuz. Despite initial concerns over reopening plans, oil futures edged lower on Friday as investors weighed the likelihood of a deal between Gulf states and Iran. Brent crude futures were down 75 cents at $81.74 a barrel, while U.S. West Texas Intermediate futures fell 66 cents to $76.63.

The Strait of Hormuz is a critical waterway for global oil supplies, with roughly a fifth of the world's oil and liquefied natural gas passing through it before the Iran war began in February. Prices rose earlier in the week as Iran reviewed a bill to ban U.S. and Israeli vessels from the strait.

However, analysts note that developments this week have signalled ongoing hostilities between Iran and the U.S., with no clear resolution in sight. The proposed deal is not easily workable due to U.S. sanctions and restrictive insurance clauses on any payments, according to four industry sources.