Oil Prices Firm Up Amid Strait of Hormuz Concerns
Oil prices firmed up on Friday due to concerns over plans for the Strait of Hormuz, a crucial waterway for global oil trade. The Brent crude futures rose by $83.24 per barrel, while US West Texas Intermediate futures increased to $77.71 per barrel.
The concerns revolve around Iran's proposed draft plan for transit conditions in the Strait, which could lead to fees of 5-7% on cargo prices from ships using the waterway. Oman is discussing a fee of around 3%, while the US wants no fees at all.
Rystad Energy analyst Lin Ye noted that oil prices are reacting to Iran's plan, not pricing in a bad deal. Instead, it's about confirming that any agreement would be managed and conditional, rather than restoring normal flow.
Vanda Insights' founder Vandana Hari said the market remains in the dark about what needs to happen for an agreement to be clinched. Meanwhile, Yemen's Houthis carried out missile and drone attacks on Saudi deployments in Marib and Hadramout.