DTN Oil Update
Oil Up 3% as Iran Wants U.S., Israel Ships Off Hormuz
SECAUCUS, N.J. (DTN) -- Crude and refined product futures rose 3% or more Thursday on media reports that U.S. and Israeli commercial ships will likely be blocked from using the Strait of Hormuz under an emerging Iran-Oman plan for control of the waterway.
Vessels tied to countries or individuals that had caused Tehran harm will also be restricted from the Strait unless Iran is compensated, the reports said, adding that offenders might have to pay up to 20% of cargo value in order to pass.
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The reports raised tensions across the Middle East, driving oil prices higher.
NYMEX WTI crude for September delivery settled up $2.07, or 2.75%, at $77.29 bbl. ICE Brent crude for October closed up $3.04, or 3.8%, at $82.49 bbl.
Among refined products, NYMEX ULSD for September delivery advanced $0.0858, or 2.26%, to finish at $3.8820 gallon. September RBOB climbed $0.0997, or 3.51%, to $2.9385 gallon.
The U.S. Dollar Index rose by 0.284 points to 99.83 against a basket of currencies.
Iran's plans for the Hormuz were unveiled days after U.S. Treasury Secretary Scott Bessent and President Donald Trump said a deal to unlock the waterway could be announced before the end of this week.
The official U.S. position is that any route on the Hormuz must operate without impediments and charges as it is an international waterway, where no single party controls lanes or transit rights. Iran has identified a passage north of the Hormuz as the only legitimate path on the Strait and warned that ships risk attacks if they strayed to other parts of the waterway.
U.S. Central Command maintains that the southern route through the Strait of Hormuz through Omani territorial waters remains free and open for commercial traffic. But the U.K. Maritime Trade Operations Centre reported new explosions near commercial tankers off the coasts of Yemen and Oman that straddle the southern route.
Media reports also said Tehran has threatened to strike Gulf states hard if they could not convince the United States to end its war against Tehran. Diplomatic efforts have been slow since fighting ceased two weeks ago, with sporadic hostilities suggesting no end soon to the nearly seven-month-long war.