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Brent rises over $1 on uncertainty around Strait of Hormuz deal
Brent futures settled at $83.55 a barrel, up 1.3%, while WTI ended at $78.18, gaining 1.15%, as markets weigh whether U.S.-flagged vessels would be allowed to transit the strait.
Brent crude climbed more than $1 a barrel on Friday as investors grappled with uncertainty over negotiations tied to control and reopening of the Strait of Hormuz, a key shipping lane for global oil and liquefied natural gas flows. Reuters reported that Brent crude futures settled at $83.55 a barrel, up $1.06, or 1.3%, while West Texas Intermediate futures finished at $78.18, up 89 cents, or 1.15%.
The market has seen sharp swings as signals about a potential resolution have come and gone, following an escalation that began late February and has stretched into its sixth month. Reuters said oil futures were more than $3 higher on Thursday after Iran reviewed a bill that would ban U.S. and Israeli vessels from transiting the strait, with prices having earlier fallen as a possible solution seemed more likely.
Reuters added that the market is still focused on what conditions would apply to specific transit scenarios, including whether an Iran-Oman agreement would allow a U.S.-flagged vessel to pass and whether ships headed for U.S. ports would be permitted. The outlet said both Iran and Oman are said to have agreed on shipping routes through the strait, but it remains unclear if the United States would accept the terms.
Analysts cited by Reuters also pointed to ongoing friction, including disagreements over fees for using the strait. Reuters reported that Iran is seeking fees of between 5% and 7% of cargo prices, Oman is discussing fees of about 3%, and Washington wants no fees at all.
Latest closeWTI crude $78.07 ▲3.8%|Brent $83.46 |Nat gas $2.620 ▼2.5%