Oil Prices Volatile as Strait of Hormuz Negotiations Stall

Oil prices continue to be volatile due to ongoing uncertainty surrounding negotiations in the Strait of Hormuz. Brent crude oil climbed over $1 a barrel on Friday, settling at $83.55 a barrel, while West Texas Intermediate futures finished at $78.18 a barrel.

The uncertainty stems from Iran's draft plan to impose fees on cargo vessels using the strait, with senior Iranian officials suggesting charges of between 5% and 7% of the price of cargoes. Oman is discussing fees of around 3%, while Washington wants no fees at all.

Analysts say that the proposed deal is not easily workable due to US sanctions and restrictive insurance clauses on any payments. Bjarne Schieldrop at SEB Research stated, 'The structure of the Iran-Oman agreement in its current form and the power it yields to Iran is nothing that Trump can accept politically.'

The continued uncertainty has caused oil prices to fluctuate wildly, with Brent crude futures settling more than $3 a barrel higher on Thursday. However, prices fell earlier in the week as a possible solution to the conflict looked more likely.