Global oil prices surged more than 3% on Thursday after reports that an Iranian parliamentary committee is reviewing legislation that could restrict US and Israeli vessels from transiting the Strait of Hormuz, a vital global energy shipping route. The proposed move has renewed concerns over potential disruptions to oil supplies, pushing crude prices sharply higher.
Brent crude futures climbed $3.09 (3.89%) to $82.54 per barrel, while US West Texas Intermediate (WTI) crude gained $2.49 (3.31%) to $77.71 per barrel during midday trading.
According to Iran's Fars News Agency, lawmakers are considering a bill that would prohibit vessels from the United States, Israel, and other countries deemed hostile from using the Strait of Hormuz. The proposed legislation also includes penalties of up to 20% of the cargo's value for ships violating the restrictions.
The development has heightened fears over the security of one of the world's busiest oil transit routes. Before the Iran conflict escalated earlier this year, nearly 20% of global oil and liquefied natural gas (LNG) supplies passed through the Strait of Hormuz each day, making any potential disruption a major concern for international energy markets.
Market analysts said investors remain focused on geopolitical developments in the Middle East. Ongoing uncertainty surrounding US-Iran relations and delays in diplomatic efforts continue to support higher crude oil prices as traders assess the risk of supply disruptions.
Adding to market concerns, Yemen's Houthi movement claimed missile and drone attacks targeting Saudi-aligned forces in Marib and Hadramout, while also reporting strikes on military infrastructure. The group previously claimed attacks on Saudi oil tankers in the Red Sea and the Gulf of Aden, although Saudi authorities have not confirmed those incidents.
Analysts warned that while Houthi attacks have so far had a limited impact on global oil and gas supplies, any escalation could threaten key shipping lanes, including the Red Sea, further increasing volatility in energy markets.
Shipping data also showed that crude oil and condensate exports from Gulf countries remained largely stable in July but were still approximately 40% below pre-conflict levels, reflecting the continued impact of regional instability.
Iran has also warned Gulf states that any future US military action against its territory could trigger retaliatory strikes on critical energy infrastructure across the region, raising concerns over the security of global oil supplies.
The latest geopolitical tensions have reinforced expectations of continued volatility in global oil prices, with investors closely monitoring developments involving Iran, the Strait of Hormuz, and regional security for their potential impact on energy markets.
