Crude oil gains as Iran plans to ban US, Israeli ships from Hormuz transit
At 10.02 am on Friday, October Brent oil futures were at $83.91 (+1.72%), and September WTI crude oil futures were at $78.44 (+1.49%)
Crude oil prices surged on Friday morning as Iran announced plans to ban US and Israeli ships from utilizing the Strait of Hormuz. On October 1st, Brent oil futures hit $83.91, marking a 1.72% increase, while WTI crude futures rose by 1.49% to $78.44. August crude futures on the MCX opened at ₹7488, up 1.50%, and September futures opened at ₹7402, up 1.47%.
Warren Patterson, Head of Commodities Strategy at ING Think, and Ewa Manthey, Commodities Strategist, noted that oil prices had rallied on Thursday, with ICE Brent settling 3.8% higher, pushing it above $82 a barrel. The analysts emphasized that the likelihood of a smooth negotiation between the US and Iran remains slim. Iran reportedly aims to ban US and Israeli vessels from the Strait of Hormuz and seeks compensation from hostile nations before they can resume using the vital waterway.
Iran also intends to impose service fees instead of tolls for ships passing through the strait. The analysts expressed uncertainty about reaching a sustainable deal, stating that the current volatility makes it challenging to forecast a stable market. Despite recent progress, the growing distrust and harsh rhetoric between the US and Iran could exacerbate the situation.
US President Donald Trump expressed optimism about the conflict's swift resolution, stating that the war with Iran would end soon. However, he acknowledged the existence of powerful munitions with an unlimited supply, while others are more limited in availability.
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