Washington, United States – Oil prices witnessed a noticeable rise during Friday’s trading. They continued to achieve gains for the second session in a row. This came in light of growing geopolitical concerns and tensions regarding the mechanism for reopening the Strait of Hormuz. After Iran, in cooperation with the Sultanate of Oman, put forward new proposals to regulate maritime navigation in the strait. These proposals include prohibiting the passage of ships classified as “hostile.” The proposals also include imposing fees and fines on some other commercial ships.
Brent and West Texas Intermediate crude oil gains
According to Reuters, energy contracts posted further gains this morning. Brent crude futures rose 80 cents, or 0.97%, to $83.29 a barrel. West Texas Intermediate (WTI) crude futures also climbed 64 cents, or 0.83%, to $77.93 a barrel.
Previous leap and developments in the Iranian draft law
This surge follows the sharp market fluctuations witnessed on Thursday. On that day, oil prices jumped by more than $3 a barrel. This jump came after Iran began reviewing a draft bill that would impose a complete ban on US and Israeli ships passing through the Strait of Hormuz, a vital global waterway. Approximately one-fifth of the world’s oil and seaborne liquefied natural gas supplies pass through this strait.
Price trajectory and anticipated weekly losses
Despite the current upward trend, it’s worth noting that oil prices had fallen sharply at the beginning of the week amid growing hopes and expectations for a diplomatic resolution to the regional conflict. However, Brent crude has since rebounded and surpassed the $80 per barrel mark. It fell below that threshold for the first time since July 13th. With these fluctuating prices, futures contracts for both benchmark crudes are on track to record combined weekly losses of nearly 8%. This comes amid cautious anticipation from investors regarding the impact of restrictions on shipping and global energy supplies in the coming period.
