FX.co ★ Oil Extends Gains as Hormuz Tensions Resurface

Crude oil climbed above $78 per barrel on Friday, extending the previous session’s gains as renewed tensions in the Strait of Hormuz unnerved markets and raised fresh doubts about efforts to fully reopen the critical shipping lane. Reports indicated that Iran struck what it called “hostile targets” in the strait following explosions near Qeshm Island. Under a proposed Iran–Oman agreement covering the waterway, Tehran aims to bar US and Israeli vessels from transiting Hormuz and to require countries it deems hostile to pay compensation before being granted passage. Iran has also suggested penalties equivalent to 20% of a vessel’s cargo value for any violations and has stated that the strait will only be fully reopened once the US maritime blockade is lifted. The draft proposal, now under review by the Iranian parliament, sets out stricter conditions for commercial shipping through the Strait of Hormuz than markets had anticipated.