Brent crude oil prices rose by more than $1 a barrel on Friday, as uncertainty continued to surround negotiations over arrangements governing the Strait of Hormuz and efforts to reopen the vital waterway.
Brent crude futures settled $1.06 higher, or 1.3%, at $83.55 per barrel. U.S. West Texas Intermediate (WTI) futures gained 89 cents, or 1.15%, to $78.18 per barrel.
Oil futures had gained more than $3 a barrel at Thursday’s close after Iran considered a draft law that would prohibit U.S. and Israeli vessels from transiting the Strait of Hormuz. Before the war broke out in late February, the strategic waterway carried nearly 20% of global oil and liquefied natural gas supplies.
Prices had fallen earlier in the week as expectations of a potential settlement to the conflict increased, continuing a pattern of sharp gains and declines since the United States and Israel launched a joint attack on Iran in late February, triggering a war that has now entered its sixth month.
Brent was heading toward a weekly decline of more than 8%, while WTI was on course to lose more than 7% for the week.
Reports indicated that Iran and Oman had agreed on a route for vessels to use through the Strait of Hormuz, which lies between the two countries. However, it remained unclear whether the United States would accept the proposed arrangements.
A senior Iranian official said Tehran was seeking to impose transit fees of 5% to 7% of the value of goods transported through the strait. Oman, meanwhile, was discussing fees of around 3%, while Washington was insisting that no fees should be imposed.
The Iranian official said, “The longer supply disruptions continue, the longer global commercial inventories will continue to be drawn down.”
Four industry sources said the proposed agreement would be difficult to implement because of U.S. sanctions and insurance requirements affecting payments.
Source: Reuters
