BY COMFORT OGBONNA
Oil prices climbed on Friday as renewed uncertainty surrounding the Strait of Hormuz fueled concerns over potential disruptions to global energy supplies, offsetting expectations that diplomatic efforts could ease tensions in the Middle East.
Brent crude futures gained 80 cents, or 0.97%, to trade at $83.29 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 64 cents, or 0.83%, to $77.93 per barrel in early trading.
The gains followed a strong rally in the previous session, when oil prices surged by more than $3 a barrel after Iran began reviewing new measures that could significantly alter shipping access through the strategically important Strait of Hormuz. The waterway serves as one of the world’s most critical energy transit routes, carrying roughly one-fifth of global crude oil and liquefied natural gas exports.
Market sentiment has shifted dramatically throughout the week. Earlier declines were driven by optimism that diplomatic negotiations could reduce hostilities in the region, pushing Brent crude below $80 per barrel for the first time since mid-July. However, fresh developments involving proposed shipping restrictions quickly reversed that trend, highlighting the market’s sensitivity to geopolitical risks.
The latest proposal, reportedly being discussed by Iranian officials in coordination with Oman, would establish new transit conditions for vessels passing through the Strait of Hormuz. Under the draft framework, ships from countries considered hostile could face restrictions, while others could be required to pay transit fees before entering the waterway.
Energy analysts said the proposal suggests that any future agreement would likely involve tightly controlled access rather than a complete return to unrestricted commercial shipping.
According to market analysts, investors are increasingly pricing in the possibility that tensions between the United States and Iran could persist even if diplomatic negotiations continue. Rather than signaling a rapid resolution to the conflict, the latest developments indicate that any arrangement governing the strait may include conditions that could complicate international shipping and energy trade.
An Iranian lawmaker said a parliamentary committee is reviewing preliminary legislation that would prohibit vessels from the United States, Israel and other nations deemed hostile from using the Strait of Hormuz. The proposed bill would also impose financial penalties of up to 20% of the cargo’s value on ships found in violation of the new regulations.
Officials familiar with the discussions indicated that Iran is seeking transit fees ranging from 5% to 7% of the value of cargo transported through the strait. Oman is reportedly considering a lower fee structure of about 3%, while the United States continues to oppose the introduction of any transit charges.
Despite ongoing negotiations, industry experts have expressed skepticism about the feasibility of such an arrangement. Existing U.S. sanctions on Iran, combined with insurance restrictions governing international shipping and financial transactions, could make implementing the proposed payment system difficult.
The uncertainty surrounding the negotiations has contributed to heightened volatility in global oil markets, with traders reacting quickly to every new development affecting one of the world’s most important energy corridors.
Meanwhile, regional security concerns intensified after Yemen’s Houthi movement claimed responsibility for missile and drone attacks targeting Saudi military positions in the provinces of Marib and Hadramout. The reported attacks added to broader concerns that instability in the region could further threaten oil infrastructure and shipping routes.
Despite the heightened tensions, President Donald Trump expressed optimism on Thursday that the conflict could come to an end in the near future. However, financial markets remained cautious, with traders focusing more on the evolving situation in the Strait of Hormuz than on political forecasts.
Although both Brent and WTI crude posted gains on Friday, the two benchmark contracts remained on track to record weekly losses of approximately 8%, reflecting the sharp swings in market sentiment driven by rapidly changing geopolitical developments.
With the Strait of Hormuz continuing to serve as a vital gateway for global energy exports, investors are expected to closely monitor diplomatic negotiations, military activity and any new shipping regulations that could influence oil prices in the days ahead.
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