Oil prices rose on Friday after reports that a preliminary draft proposal negotiated between Iran and Oman would bar US and Israeli vessels from transiting the Strait of Hormuz until compensation is paid for war damages.
Brent crude futures rose 1.2 percent to 83.48 dollars a barrel by 00:10 GMT, while US West Texas Intermediate (WTI) futures gained 1.1 percent to 78.84 dollars, according to AGBI. The two benchmarks had fallen between 5 and 8 percent over the previous five days but remain up nearly 28 percent since January 1.
Iran's semi-official Fars news agency reported that the draft has been sent to a parliamentary committee for approval and would restrict transit by ships from nations deemed hostile, AGBI wrote. The proposal also includes a fine of up to 20 percent of a cargo's value for violators, the agency said, citing an Iranian government official.
US President Donald Trump said on Thursday that a deal to reopen the strait had not been finalised, as reported by Fox News.
Diplomatic efforts continue. Iranian Foreign Minister Abbas Araghchi said on Saturday that the agreement with Oman was "very close", but cautioned that a full reopening of the waterway would depend on the United States honouring the commitments made under the memorandum of understanding (MoU) signed in June and later violated, according to Al Jazeera.
Hossein Mohebbi, spokesperson for the Islamic Revolutionary Guard Corps (IRGC), told state media that the reopening of the Strait of Hormuz "has its own specific mechanism and has nothing to do with the negotiations between Iran and Oman", adding that the US will have no choice but to accept the "conditions" set by Iran. Mohebbi said the IRGC views the strait not just as an economic waterway but as a source of power tied to Iran's geographical position that it intends to leverage.
Iran and Oman have agreed on the coordinates of the routes through the waterway: inbound traffic would pass through a northern lane in Iranian territorial waters, while outbound traffic would go through a southern lane in Omani waters, coordinated with Tehran. According to US media, the interim agreement is envisaged for 60 days and can be extended, Al Jazeera reported.
Hassan Qashqavi, spokesperson for the national security commission of Iran's parliament, confirmed that the framework of the arrangement with Oman had been agreed and that a deal could be expected soon, pending a green light from "higher levels".
About 20 percent of the world's oil passes through the Strait of Hormuz in peacetime. The waterway has been mostly disrupted since the US and Israel attacked Iran on February 28.
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