Oil Prices Rebound on Iran-Oman Deal Hopes
Oil prices rebounded on Friday as markets assessed a pending agreement between Iran and Oman over rules for transit of the Strait of Hormuz. Brent crude futures rose by 93 cents, or 1.14%, to $83.42 per barrel, while West Texas Intermediate futures increased by 96 cents, or 1.24%, to $78.25.
The agreement would allow ships to pass through the strait, which is crucial for global oil trade as a fifth of the world's oil and liquefied natural gas passes through it. However, analysts are cautious about the deal's feasibility due to US sanctions and restrictive insurance clauses on payments.
Iran is seeking fees between 5% and 7% of cargo prices from ships using the strait, while Oman proposes a fee of around 3%. The US wants no fees at all. Industry sources say the proposed deal is not easily workable due to these differences.