TLDR
- Brent crude futures advanced 1.1% to $83.43 while WTI gained 0.8% to $77.91 on Friday
- Iranian lawmakers are considering legislation to prohibit U.S. and Israeli vessels from the Strait of Hormuz
- Iran’s Revolutionary Guard conducted strikes against “hostile targets” in the Strait Thursday evening
- A potential Iran-Oman agreement to restore Hormuz access may exclude American and Israeli shipping
- Market pressures intensified from Houthi assaults on Saudi sites and a Ukrainian drone attack on Russian refining capacity
Crude futures rebounded Friday as prospects dimmed for full restoration of traffic through the Strait of Hormuz. New reports of Iranian military operations and pending legislation aimed at Western vessels drove prices upward.
[[LINK_START_0]]Brent crude futures[[LINK_END_0]] gained 1.1% to reach $83.43 per barrel. West Texas Intermediate advanced 0.8% to $77.91. Despite Friday’s rally, both benchmarks remained on course for weekly declines exceeding 7%.
Earlier this week, futures had tumbled on speculation that Iran and Oman were nearing a shipping agreement. That positive sentiment pushed Brent and WTI significantly lower before Friday’s turnaround.
The price recovery followed reports that Iran’s Islamic Revolutionary Guard Corps targeted what it described as “hostile targets” near Qeshm Island within the Strait of Hormuz on Thursday evening local time, as reported by Iran’s semi-official Fars News Agency.
Iran Moves to Block U.S. and Israeli Ships
A committee within Iran’s parliament is examining proposed legislation that would prohibit vessels linked to the U.S. and Israel from passing through the Strait of Hormuz. The draft law would additionally impose fines reaching 20% of cargo value on those violating the restrictions.
A potential Iran-Oman agreement that had temporarily boosted market confidence reportedly contains provisions that would exclude Israeli vessels and demand compensation from nations Tehran considers hostile.
“Deals to reopen the Strait of Hormuz remain elusive, with investors teetering in the balance,” said Rob Haworth, senior investment strategy director at US Bank Asset Management Group. “For now traffic remains low and the path to a durable deal remains unclear.”
The Strait of Hormuz facilitates approximately one-fifth of worldwide oil and liquefied natural gas transport. Any sustained limitation on passage through this waterway represents a significant concern for energy markets.
Other Supply Pressures Build
Regional conflicts elsewhere heightened market anxieties. Yemen’s Houthi movement, which maintains ties to Iran, asserted responsibility for strikes on Saudi military installations and infrastructure. These claims sparked renewed concerns about Red Sea shipping corridors.
A Ukrainian drone assault allegedly ignited a significant Russian refinery. The incident compounded supply disruption concerns already influencing the market.
Market participants were also monitoring the U.S. nonfarm payrolls report scheduled for Friday. The employment figures could shape the Federal Reserve’s upcoming decisions on interest rates. Elevated rates can dampen economic growth and diminish fuel consumption.
Notwithstanding Friday’s advances, both Brent and WTI traded substantially below levels observed earlier in the week. The weekly declines underscore how rapidly market sentiment transformed when the Hormuz agreement failed to materialize.
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