Crude oil prices rise as Iran proposes new conditions for transit through the Strait of Hormuz

Crude oil prices extended their gains on August 7 amid growing concerns over plans to restore full commercial shipping through the Strait of Hormuz, Reuters reported.

Brent crude oil futures rose by 80 cents (0.97%) to $83.29 per barrel as of 03:03 GMT.

U.S. West Texas Intermediate (WTI) crude oil futures gained 64 cents (0.83%) to $77.93 per barrel.

Analysts said this week’s developments indicate that tensions between Iran and the United States remain unresolved.

“Crude oil prices are reacting to Iran’s proposed framework for transit through the Strait of Hormuz, which would ban U.S. and Israeli vessels while requiring other ‘hostile’ countries to pay transit compensation,” said Lin Ye, Vice President of Commodity Markets at Rystad Energy.

According to a senior Iranian official, Tehran is seeking to charge vessels transiting the strait a fee of 5–7% of the cargo’s value. Oman is considering a transit fee of around 3%, while Washington insists that no such charges should be imposed.

Four industry sources said the proposed arrangement would be difficult to implement because of U.S. sanctions and insurance restrictions affecting any related payments.

Earlier, Iran warned Gulf states that they could face retaliatory measures if the United States launches new strikes against Iranian territory.

Tags: Iran, prices, Hormuz