Oil Prices Surge on Strait of Hormuz Concerns
Oil prices rose on Friday amid concerns over the Strait of Hormuz reopening plans. Iran, working with Oman, suggested banning vessels deemed hostile from the strait and heavily fining those which violated the proposed rules.
Brent crude futures rose 80 cents, or 0.97%, to $83.29 a barrel by 0303 GMT, while US West Texas Intermediate futures rose 64 cents, or 0.83%, to $77.93.
The Strait of Hormuz is a crucial oil shipping route where roughly a fifth of the world's oil and liquefied natural gas is transmitted. Iran reviewed a bill to ban US and Israeli vessels from the strait, which would fine violators up to 20% of cargo value.
Lin Ye, vice president of commodities market, oil at consultancy Rystad Energy, said that the events unfolding this week signalled that the hostilities between Iran and the US are not yet over. 'The proximate trigger is more specific: it's reacting to Iran's published draft plan for Hormuz transit conditions,' he added.