Iran Moves to Ban U.S. and Israeli Ships from Strait of Hormuz as Oil Prices Rise

TLDR

• Brent crude rose 1.1% to $83.43 and WTI climbed 0.8% to $77.91 on Friday
• Iran’s parliament is reviewing a bill to bar U.S. and Israeli ships from the Strait of Hormuz
• Iran’s Revolutionary Guard struck “hostile targets” in the Strait on Thursday night
• A proposed Iran-Oman deal to reopen Hormuz may exclude U.S. and Israeli vessels
• Additional pressure came from Houthi attacks on Saudi infrastructure and a Ukrainian drone strike on a Russian refinery

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Oil prices pushed higher on Friday after hopes of a full reopening of the Strait of Hormuz faded. Fresh reports of Iranian military action and new legislation targeting U.S. and Israeli ships sent prices climbing.

Brent crude futures rose 1.1% to $83.43 per barrel. West Texas Intermediate climbed 0.8% to $77.91. Both benchmarks were still on track for weekly losses of more than 7%.

Earlier in the week, prices had fallen on expectations that Iran and Oman were close to a shipping deal. That optimism drove Brent and WTI down sharply before Friday’s reversal.

The recovery came after reports emerged that Iran’s Islamic Revolutionary Guard Corps struck what it called “hostile targets” near Qeshm Island in the Strait of Hormuz on Thursday night local time, according to Iran’s semi-official Fars News Agency.

Iran Moves to Block U.S. and Israeli Ships

An Iranian parliamentary committee is reviewing legislation that would ban U.S. and Israeli-linked vessels from transiting the Strait of Hormuz. The proposed law would also impose penalties of up to 20% of cargo value on violators.

🇮🇷 Iran just dropped a draft plan that basically says: “We’ll open Hormuz when we’re good and ready… and on our terms.”

They’ve lined up a new route with Oman, but only if the U.S. lifts its blockade first.

American and Israeli ships? Banned. Anything they call “hostile”?… pic.twitter.com/UVGWbw2Ica

— Mario Nawfal (@MarioNawfal) August 7, 2026

A proposed Iran-Oman deal that had briefly lifted market spirits reportedly includes conditions that would bar Israeli ships and require compensation from what Tehran calls hostile nations.

“Deals to reopen the Strait of Hormuz remain elusive, with investors teetering in the balance,” said Rob Haworth, senior investment strategy director at US Bank Asset Management Group. “For now traffic remains low and the path to a durable deal remains unclear.”

The Strait of Hormuz handles roughly one-fifth of global oil and liquefied natural gas shipments. Any lasting restriction on traffic there is a major concern for energy markets.

Other Supply Pressures Build

Conflict elsewhere added to market concerns. Yemen’s Houthi movement, aligned with Iran, claimed attacks on Saudi military positions and infrastructure. That raised fresh worries about Red Sea shipping routes.

A Ukrainian drone strike reportedly set a major Russian refinery on fire. The attack added to supply disruption fears already weighing on the market.

Investors were also watching the U.S. nonfarm payrolls report due Friday. The data could influence the Federal Reserve’s next steps on interest rates. Higher rates can slow economic activity and reduce fuel demand.

Despite Friday’s gains, both Brent and WTI remained well below levels seen earlier in the week. The weekly losses reflect how quickly market sentiment shifted when the Hormuz deal failed to close.