Brent Climbs Above $83 as Hormuz Reopening Faces Fresh Uncertainty

Crude oil prices extended gains on Friday with Brent climbing above $83 per barrel as fresh uncertainty surrounding plans to reopen the Strait of Hormuz revived concerns over the security and cost of energy shipments through the strategic waterway.

Brent crude oil, against which Nigerian crude oil is priced, gained 80 cents or 0.97 percent to $83.29 per barrel at 04:03 a.m. Nigerian time, while U.S. West Texas Intermediate (WTI) crude advanced 64 cents or 0.83 percent to $77.93 per barrel.

The rebound came as traders reassessed expectations for a smooth reopening of the Strait of Hormuz following reports that Iran is considering conditions that could restrict access for vessels associated with countries it considers hostile.

An Iranian parliamentary committee is reviewing proposals that could prevent U.S., Israeli and other vessels classified as hostile from passing through the waterway.

Ships found violating the proposed restrictions could face penalties equivalent to as much as 20 percent of the value of their cargo.

The proposed measures have introduced another layer of uncertainty into a market that had begun pricing in the possibility of improved energy flows through Hormuz following recent diplomatic developments.

Iran is also seeking transit charges equivalent to approximately 5 percent to 7 percent of the value of cargo passing through the strait, while Oman has discussed fees of around 3 percent, according to Reuters.

The United States, however, has pushed for vessels to be allowed to transit without additional charges.

The Strait of Hormuz remains one of the world’s most important energy corridors with roughly one-fifth of global oil and liquefied natural gas flows passing through the route before the recent conflict.

Any prolonged restrictions, additional fees or uncertainty over access could increase transportation and insurance costs while limiting the volume of crude and other energy products reaching international markets.

Oil prices had weakened earlier in the week as expectations of progress towards reopening the strait reduced the geopolitical risk premium built into crude prices.

However, the latest uncertainty has brought supply concerns back into focus and supported the recovery in both major benchmarks.

Despite Friday’s gains, Brent and WTI were still heading for a weekly decline of around 8 percent, reflecting the sharp losses recorded earlier in the week as traders responded to changing expectations surrounding Middle East supply.

The direction of crude prices will remain closely tied to developments around Hormuz, with investors watching for clarity on the conditions under which vessels will be allowed to resume normal passage.

A smooth reopening could ease supply concerns and place downward pressure on prices, while prolonged restrictions or disagreements over transit conditions could keep a geopolitical premium embedded in the global crude market.