Oil Prices Surge as Strait of Hormuz Reopening Plans Spark Concerns

Oil prices rose on Friday as concerns about the Strait of Hormuz reopening plans resurfaced. Iran, in collaboration with Oman, has suggested banning vessels deemed hostile from the strait and fining those that violate the proposed rules.

Brent crude futures increased by $0.80, or 0.97%, to $83.29 a barrel by 0303 GMT, while US West Texas Intermediate futures rose by $0.64, or 0.83%, to $77.93.

An Iranian lawmaker stated that a parliamentary committee is reviewing a preliminary bill to ban US and Israeli vessels from the Strait of Hormuz, as well as fine violators up to 20% of cargo value. Iran aims to charge fees between 5% and 7% of cargo price for ships using the strait.

Oman is discussing lower fees, around 3%, while Washington wants no fees at all. However, industry sources say the proposed deal faces challenges due to US sanctions and restrictive insurance clauses on payments.