Oil climbs above $83 on fresh Strait of Hormuz supply fears

August 07, 2026 (MLN): Oil prices advanced on Friday as concerns over potential supply disruptions intensified after Iran released a draft plan outlining new restrictions for vessels transiting the Strait of Hormuz.

Currently, Brent crude futures is up, 1.44%, at $83.68 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures is up by $0.96, or 1.24%, to $78.25 per barrel by [10:55 am] PST.

Market sentiment was further influenced by rising geopolitical tensions in the Middle East, with analysts warning that elevated energy prices could add to inflationary pressures.

In a note, Westpac said stronger oil prices showed the risk of renewed inflation stemming from energy markets and regional developments, supporting the U.S. dollar while weighing on government bonds.

According to the draft proposal, Iran intends to prohibit U.S. and Israeli vessels from passing through the Strait of Hormuz. The document also states that countries deemed to have caused harm to Iran would be barred from using the waterway until compensation is provided, according to CNBC.

Iran and Oman are reportedly negotiating an agreement to establish separate transit routes through the strategic strait. Media reports suggest inbound ships would travel through Iranian waters, while outbound traffic would pass via Omani waters. However, no formal agreement has been announced.

Supply concerns were also heightened by developments in Russia and Saudi Arabia. UOB said Ukraine carried out overnight strikes on two major Russian oil refineries Yaroslavl/Yanos and Bashneft's Novoil facility.

The bank also noted that U.S. imports of Saudi crude fell to zero in July for the first time since 1985.

Meanwhile, uncertainty persists over efforts to reopen the Strait of Hormuz. U.S. President Donald Trump said at the Oval Office that the situation involving Iran would be resolved "pretty soon." Tehran, however, dismissed the remarks, accusing the U.S. president of engaging in "theater diplomacy."

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