Oil prices jump over $3 as Iran reviews bill to ban US, Israeli vessels from Hormuz

Oil prices experienced a significant jump on Thursday, with benchmarks rising by more than $3 a barrel. This surge was primarily driven by reports that an Iranian parliamentary committee is reviewing a bill that could ban U.S. and Israeli vessels from transiting the Strait of Hormuz.

The proposed legislation also includes substantial financial penalties, potentially fining violators up to one-fifth of the value of their cargo. Brent crude futures saw a notable increase, climbing $3.09 (3.89%) to settle at $82.54 per barrel. Similarly, U.S. West Texas Intermediate futures rose $2.49 (3.31%) to $77.71 per barrel, according to Reuters.

Analysts suggest that crude oil traders are closely monitoring developments related to U.S.-Iran agreements. "Crude traders remain focused on the US/Iran agreements, and the longer the delays, the more prices will fade back to the upside," noted Dennis Kissler, senior vice president of trading at BOK Financial.

Historically, the Strait of Hormuz is a critical chokepoint for global energy supplies. Before tensions escalated in late February, approximately one-fifth of the world's daily oil and liquefied natural gas (LNG) flowed through this vital waterway. In separate news, a major oil refinery in Russia's Yaroslavl region was reportedly on fire following a Ukrainian drone attack, with emergency services working to contain the blaze.

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Crude traders remain focused on the US/Iran agreements, and the longer the delays, the more prices will fade back to the upside