Oil prices rose on Friday as markets evaluated negotiations between Iran and Oman for an agreement to determine ship passage through the Strait of Hormuz, one of the world's primary oil transport channels.
Brent crude gained 1.14% to $83.42 a barrel, while West Texas Intermediate crude recorded a rise of 1.24% to $78.25 a barrel. Despite Friday's recovery, both Brent and WTI lost more than 9% on the week as investors weighed the chances of conflict de-escalation in the region.
Strait of Hormuz shipping negotiations
Andrew Lipow, president of Lipow Oil Associates, said the market is trying to clarify whether the negotiated deal will allow U.S.-flagged or U.S.-owned ships to pass through the Strait of Hormuz. Uncertainty remains over the duration of the war between the United States, Israel, and Iran, while analysts warned that prolonged supply disruptions increase pressure on global oil reserves.
Analysts said the proposed agreement remains difficult to implement because of U.S. sanctions and restrictions on insurance coverage. They added that Washington is unlikely to accept a deal granting increased authority to Iran due to strong political opposition in the United States.
Meanwhile, Saudi Arabia is on high alert. A senior Saudi official said the country expects coordinated attacks from pro-Iranian militias in Iraq and Houthis in Yemen.
