Oil Prices Rise as Strait of Hormuz Reopening Faces New Doubts

KUALA LUMPUR, AUGUST 2026 – Global oil prices moved higher on Friday as investors grew increasingly doubtful that plans to reopen the Strait of Hormuz would quickly restore normal shipping through one of the world’s most important energy routes.

Brent crude futures rose 99 cents, or 1.2%, to US$83.48 per barrel in early trading, while US West Texas Intermediate crude gained 85 cents, or 1.1%, to US$78.84 per barrel.

The increase followed a strong session on Thursday, when both crude benchmarks settled more than US$3 higher amid renewed concerns over Iran’s proposed restrictions on vessels using the strategic waterway.

Before the war began at the end of February, the Strait of Hormuz carried roughly one-fifth of the world’s oil and liquefied natural gas supplies, making any prolonged disruption particularly significant for global energy markets.

Iranian lawmakers are reviewing preliminary legislation that could prohibit US, Israeli and other vessels considered hostile from passing through the strait.

The proposed measure could also impose penalties of up to 20% of a ship’s cargo value on vessels found to have violated the rules.

Questions have also emerged over possible transit charges.

Iran is reportedly seeking fees equivalent to between 5% and 7% of cargo values for vessels using the strait, while Oman is considering a charge of around 3%.

The United States, meanwhile, has pushed for vessels to be allowed to transit the waterway without paying such fees.

The competing proposals have raised concerns over whether a workable agreement can be reached.

Industry sources said the proposed arrangement could also prove difficult to implement because of US sanctions and restrictive insurance conditions surrounding payments to Iran.

The uncertainty has provided support for oil prices despite earlier optimism that diplomatic negotiations could reduce tensions and allow commercial shipping to return to normal.

KCM Trade chief market analyst Tim Waterer said confidence remains limited because markets have already witnessed a short-lived arrangement earlier this year.

As a result, traders remain cautious about assuming that any new agreement would immediately restore unrestricted tanker traffic.

The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea, making it a critical passage for crude oil, petroleum products and liquefied natural gas exported by major Middle Eastern producers.

Any restrictions on vessels travelling through the strait could affect global supply, shipping costs and energy prices, particularly for major importers in Asia and Europe.

The latest developments also come against the backdrop of continuing tensions elsewhere in the Middle East.

Yemen’s Houthi movement said it carried out missile and drone attacks on what it described as Saudi deployments in Marib and Hadramout on Thursday.

The additional security concerns have reinforced investor worries over the possibility of wider disruptions to regional shipping and energy infrastructure.

Meanwhile, US President Donald Trump said on Thursday that he believed the war could end soon, offering some hope that diplomatic efforts may eventually ease tensions.