Crude oil prices climbed Friday following Iran’s announcement of a restrictive draft proposal for the Strait of Hormuz that would prohibit American and Israeli vessels from passing through the waterway. Brent crude futures for October delivery increased 1.25% to $83.52 per barrel, while U.S. West Texas Intermediate futures for September rose 1.10% to $78.14 per barrel, reflecting investor anxiety over potential supply disruptions in this critical shipping channel.
The proposed Iranian plan stipulates that vessels from nations deemed to have harmed Iran would also face transit restrictions until compensation is provided. Negotiations between Iran and Oman regarding transit route definitions for the strait continue, though no formal agreement has been finalized. Industry analysts noted that energy-related inflation concerns stemming from Middle East tensions are driving broader market movements, including strength in the U.S. dollar and weakness in government bond prices.
Supply concerns extend beyond the Strait of Hormuz, with recent Ukrainian attacks on Russian oil refineries and a dramatic decline in American crude imports from Saudi Arabia adding to market pressures. Meanwhile, diplomatic signals remain mixed, as President Trump suggested resolution appears imminent, while Iranian officials dismissed his statements as theatrical rather than substantive engagement.
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