Oil rises amid supply disruption fears following Iran's restrictive draft plan for the Strait of Hormuz

• Iran's draft plan would ban U.S. and Israeli vessels from the Strait of Hormuz and restrict other nations that have harmed Iran until compensation is paid
• Additional supply concerns emerged as Ukraine struck two major Russian oil refineries and U.S. imports of Saudi crude dropped to zero in July for the first time since 1985
• President Trump stated he believes the conflict with Iran will end 'pretty soon' while negotiations continue between Iran and Oman on transit route agreements

Market Summary: Oil Prices Rise on Iran Strait of Hormuz Tensions

Key Price Movements:

• Brent crude futures (October delivery) rose 1.22% to $83.50 per barrel
• U.S. crude futures (September) advanced 1.11% to $78.15 per barrel

Main Developments:

Oil prices climbed Friday following Iran's publication of a restrictive draft plan governing the Strait of Hormuz, a critical global shipping chokepoint. The proposed regulations would ban U.S. and Israeli vessels from transiting the strait and restrict access for other nations that have allegedly harmed Iran until compensation is paid.

Iran and Oman are reportedly negotiating an agreement to define transit routes, with inbound traffic potentially using Iranian waters and outbound traffic transiting through Omani waters. However, no deal has been finalized.

Additional Supply Concerns:

• Ukraine conducted overnight strikes on two major Russian oil refineries: Yaroslavl/Yanos and Bashneft's Novoil facility
• U.S. imports of Saudi crude dropped to zero in July for the first time since 1985

Market Implications:

Westpac analysts noted that higher oil prices signal potential inflationary pressures from energy markets and Middle East tensions, contributing to a stronger U.S. dollar and lower government bond prices. UOB analysts highlighted mounting supply concerns from multiple geopolitical fronts.

President Donald Trump offered a diplomatic note, stating he expects the conflict with Iran to end "pretty soon," though provided no specific timeline or details.

The convergence of Middle East tensions, refinery disruptions, and shifting crude trade patterns continues to support elevated oil prices and market volatility.