Oil rises as Hormuz reopening faces proposed shipping fees

Oil prices rose on Friday after Iran proposed restrictions and fees for ships using the Strait of Hormuz, a key route for global crude and liquefied natural gas. By 0303 GMT, Brent crude traded at $83.29 a barrel, up 0.97%, and U.S. West Texas Intermediate stood at $77.93, up 0.83%.

The gains followed a sharp rally on Thursday when both benchmarks climbed more than $3 after Tehran signalled any reopening could include conditions on which vessels are allowed through the waterway. Earlier in the week prices fell as traders weighed the prospect of an agreement to restore transit.

Around 20% of the world’s oil and liquefied natural gas passed through the Strait before fighting began at the end of February. Iran has proposed barring access to vessels it deems hostile, specifically naming U.S. and Israeli ships, and would impose financial penalties and transit charges on others.

An Iranian parliamentary committee is reviewing draft legislation that could impose fines of up to 20% of a cargo’s value on vessels that breach the proposed rules. The proposal also seeks transit fees equal to 5%–7% of cargo values. Oman has discussed charging about 3% for passage. The United States has rejected the notion of charging ships for transit.

Industry sources noted the proposals raise questions about whether reopening would mean standard shipping conditions or a tightly managed corridor. Lin Ye, vice president of commodities market — oil at Rystad Energy, described the market view: “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.”

Traders highlighted practical hurdles to implementation, including U.S. sanctions and insurance restrictions that could complicate payments or penalties tied to transit. Discussions about novel payment systems or insurance exemptions were reported by market participants as adding uncertainty to how quickly crude flows could return to previous levels.

Volatility has been pronounced this week. Despite Friday’s rebound, both Brent and WTI were set for weekly declines of about 8% as market positions shifted and investors reassessed timing and terms of any transit agreement. Hedge funds and macro investors adjusted positions in response to changing signals.

Regional security incidents also affected sentiment. The Houthi movement in Yemen reported missile and drone strikes against Saudi deployments in Marib and Hadramout, and U.S. President Donald Trump stated he believed the conflict would end soon.

Energy traders say they are awaiting firm operational details, including rule enforcement and acceptance by maritime, insurance and financial stakeholders, before assessing how quickly shipping through the Strait may resume at previous volumes.