Overview
- Oil benchmarks rose back toward the low $80s on Friday as reports of Iran‑Oman talks and new Iranian draft transit rules revived a geopolitical premium and prompted Citi to raise its Q3 Brent forecast to $80 a barrel.
- Iran’s parliamentary draft would bar U.S., Israeli and other vessels it labels “hostile” from the Strait of Hormuz and proposes fines while Iranian officials have talked of charging transit fees of roughly 5–7% with Oman reportedly discussing about 3%.
- Implementation faces practical obstacles because U.S. sanctions, insurance rules and payment restrictions would make enforcing fines or fees difficult and could leave any agreement fragile or partial.
- Physical markets remain tight with the IEA calling the disruption the worst supply crisis on record, Middle East output and Gulf storage down by millions of barrels per day, and the U.S. Strategic Petroleum Reserve at about 304.8 million barrels as of the week ending July 17.
- Medium distillates such as heating oil and diesel are especially vulnerable, trading well above earlier lows and raising risks to inflation and fuel costs while markets remain split between a quick de‑escalation and a longer period of constrained flows.