Oil Fluctuates at End of Week

Crude oil traded around $77 per barrel on Friday, moving between gains and losses as investors weighed negotiations between Iran and Oman over the Strait of Hormuz against renewed geopolitical tensions. Optimism over a partial reopening of the strategic waterway faded as Iran reportedly sought to exclude US and Israeli vessels and impose fees on countries it considers hostile. The US, meanwhile, has pushed for unrestricted transit and a return to pre-war conditions, leaving the two sides seemingly far apart on the terms of any agreement. President Donald Trump maintained an optimistic tone, saying the conflict could end “pretty soon” and that discussions were progressing. However, reports of Iran attacking “hostile targets” in the strait following explosions near Qeshm Island added to concerns over shipping security. Separately, Iran-backed Houthi militants said they had carried out a “large-scale” attack against forces aligned with Yemen’s Saudi-backed government.

Crude oil rose toward $78 per barrel on Friday, building on the previous session’s gains as renewed tensions in the Strait of Hormuz unsettled markets and cast fresh doubt over efforts to fully reopen the vital shipping route. Reports indicated that Iran struck what it described as “hostile targets” in the strait after explosions were reported near Qeshm Island. Under the proposed Iran-Oman agreement governing the waterway, Tehran seeks to prohibit US and Israeli vessels from transiting Hormuz and require countries deemed hostile to pay compensation before being granted passage. Iran has also proposed penalties equal to 20% of a vessel’s cargo value for violations and said the strait would only be fully reopened once the US maritime blockade is lifted. The Iranian parliament is currently reviewing the draft proposal, which outlines stricter conditions for commercial shipping through the Strait of Hormuz than markets anticipated.

Crude oil extended its gains, rising 3% to $77.5 per barrel on Thursday, after reports that an Iranian parliamentary committee is analyzing a draft proposal outlining restrictive conditions for ship traffic through the Strait of Hormuz. Under the proposal, Iran would prohibit US and Israeli vessels from transiting Hormuz and require countries deemed hostile to pay compensation before being granted passage. Tehran also proposed imposing penalties on violators equivalent to 20% of the value of the cargo carried by a vessel and stated that a full reopening of the strait would depend on the lifting of the US maritime blockade. Meanwhile, Houthi forces in Yemen claimed on Thursday to have launched attacks on Saudi troop positions, adding to geopolitical concerns across the region. Earlier in the day, US officials reiterated their confidence that a nuclear agreement with Iran was within reach, although investors remained cautious about the prospects for a durable and lasting peace.