ISLAMABAD (Kashmir English): Oil prices gained more ground on Friday with a new threat to the Strait of Hormuz and a fear of supply disruptions from new rules from Iran to the strait. “Ships considered enemy will not be allowed to pass through, or be fined heavily,” Iran suggested, along with Oman.
Brent futures rose by 99 cents, or 1.2%, to $83.48 a barrel at 0010 GMT. WTI futures rose by 85 cents, or 1.1%, to $78.84 a barrel. Yesterday, oil prices rose by over $3/barrel on the news that Iran is reviewing its legislation to ban US and Israeli vessels through the Strait of Hormuz.
The proposed bill includes preventing access for ships that come from enemy countries, and to fine the ones with 20% percent of money depending on the amount of cargo.
Iran also proposes that vessels should be charged by 5% up to 7% of the total price of the load to pass through the Strait of Hormuz. Oman’s proposal was 3%, and the USA was entirely against introducing any charge to the strait.
However, many industry professionals doubt the feasibility of such a bill, and as the US has imposed sanctions and its insurance regulations, the proposed payment method would face significant problems.
During the time, oil prices remained high due to the fear of any disruptions in the flow of oil through the Strait of Hormuz despite all expectations for the discovery of a solution through diplomatic discussions.
In the meantime, Yemen’s Houthi group announced that they had carried out air strikes and missile attacks against Saudi forces in the regions of Marib and Hadramout on Thursday.
On a side note, US President Donald Trump assured that the conflict in Yemen will end soon; nevertheless, the price of oil will continue to increase and fall with any threat or risk that could be made on supply disruptions from the Strait of Hormuz.
