Oil Prices Surge as Iran Hormuz Restrictions Renew Supply Fears

Oil prices extended their rebound during Asian trading on Friday as renewed tensions surrounding the Strait of Hormuz weakened expectations for a full reopening of the crucial energy shipping route.

Brent crude futures for October delivery gained 1.4% to $83.65 per barrel as of 00:33 GMT, while West Texas Intermediate (WTI) crude futures advanced 1.3% to $78.26 per barrel. The gains followed a strong Thursday session in which Brent jumped nearly 4% and WTI rose about 3%. Despite the recovery, both oil benchmarks remained on course for weekly declines of more than 7%.

Fresh geopolitical concerns emerged after reports said an Iranian parliamentary committee was considering legislation that would restrict U.S.- and Israeli-linked vessels from passing through the Strait of Hormuz. Ships violating the proposed rules could reportedly face penalties worth as much as 20% of their cargo value.

Iran's Islamic Revolutionary Guard Corps also said it had attacked "hostile targets" in the Strait, adding to uncertainty over shipping security and global energy supplies.

Earlier in the week, crude oil prices had fallen as traders grew optimistic that Iran and Oman were nearing an agreement to restore maritime traffic through the strategic waterway. However, hopes for a broad reopening faded after reports indicated that U.S. and Israeli vessels could remain excluded.

The Strait of Hormuz is one of the world's most important energy corridors, handling roughly 20% of global oil and liquefied natural gas shipments. Any prolonged disruption or restrictions could tighten supplies and increase volatility in global oil markets.

Supply concerns were also fueled by escalating regional conflict. Yemen's Iran-aligned Houthis claimed attacks on Saudi military facilities and infrastructure, raising fresh worries about Red Sea shipping. Separately, a Ukrainian drone attack reportedly sparked a fire at a major Russian refinery, adding another potential risk to global fuel supplies.

Traders are also awaiting Friday's U.S. nonfarm payrolls report for signals about the Federal Reserve's interest rate outlook. Strong employment data could support higher rates for longer, potentially weighing on economic growth and global oil demand.