Oil rises on concerns over Strait of Hormuz reopening plans

Aug 8: Oil extended gains on Friday amid further concerns around the opening of the Strait of Hormuz as Iran, working with Oman, suggested banning vessels deemed hostile from the strait and heavily fining those which violated the proposed rules.

Brent crude futures rose 80 cents, or 0.97per cent, to $83.29 a barrel by 0303 GMT. US West Texas Intermediate futures rose 64 cents, or 0.83 per cent, to $77.93.

Oil futures settled up at over $3 a barrel on Thursday as Iran reviewed a bill to ban US and Israeli vessels from the Strait of Hormuz where roughly a fifth of the world’s oil and liquefied natural gas transmitted before the war began at the end of February.

Prices fell earlier in the week as a possible solution to the ongoing conflict looked more likely but benchmark Brent breached $80 on Thursday after falling below that for the first time since Jul 13. Both benchmarks were headed for a weekly loss of about 8 percent.

Analysts said the events that have unfolded this week signalled that the hostilities between Iran and the US are not yet over.

"The proximate trigger is more specific, it's (oil prices) reacting to Iran's published draft plan for Hormuz transit conditions, which would ban US and Israeli vessels and require other 'hostile' countries to pay compensation before passage," said Lin Ye, vice president of commodities market �" oil at consultancy Rystad Energy.

"That's not the market pricing in a bad deal, it's pricing in confirmation that whatever emerges is a managed/conditional corridor, not a restoration of normal flow," Ye added.

An Iranian lawmaker said a parliamentary committee is reviewing a preliminary bill to ban US, Israeli and other vessels deemed hostile from the Strait of Hormuz, and fine violators of the proposed restrictions up to 20 percent of cargo value, according to Fars news agency.�"Reuters