Crude oil prices climbed sharply on Thursday after Iranian state media released a draft proposal outlining restrictive measures governing maritime traffic through the Strait of Hormuz, one of the world’s most important energy shipping routes.

Brent crude, the global benchmark, rose approximately 4% to $82.72 per barrel, while U.S. West Texas Intermediate (WTI) crude advanced about 3.5% to $77.83 per barrel.

The rebound partially reversed losses earlier in the week, when optimism surrounding potential diplomatic negotiations between the United States and Iran had pushed oil prices lower.

Iran Proposes New Restrictions on Strait Traffic

Iranian state news agency Fars published what it described as an “initial draft of the strategic plan for managing Strait of Hormuz,” outlining a series of proposed restrictions on international shipping.

According to the draft, U.S. and Israeli vessels would be prohibited from transiting the Strait of Hormuz. The proposal also states that ships from countries deemed to have harmed Iran would be barred from passage until compensation is paid.

In addition, Iran proposes imposing penalties equal to 20% of the value of a vessel’s cargo on ships found to be violating the new rules.

The draft is currently under review by an Iranian parliamentary committee and has not yet been formally adopted.

Market Optimism Gives Way to Renewed Supply Concerns

The latest proposal significantly altered market sentiment after several days of optimism that diplomatic negotiations could reopen the strategic waterway without restrictions.

Earlier this week, President Donald Trump, Treasury Secretary Scott Bessent, and Secretary of State Marco Rubio each suggested that an agreement with Iran could be reached to restore normal shipping through the Strait of Hormuz.

Those expectations contributed to an approximate 8% decline in crude oil prices during the week before Thursday’s sharp rebound.

The publication of Iran’s draft proposal has renewed concerns that any final agreement could include significant limitations on commercial shipping, potentially disrupting global energy supplies.

Security Incidents Continue in the Region

Adding to market uncertainty, the United Kingdom Maritime Trade Operations Centre reported that a commercial tanker heard two explosions while transiting waters off the coast of Oman near the Strait of Hormuz.

The vessel and its crew were reported safe, but the incident highlighted the fragile security environment surrounding one of the world’s busiest energy corridors.

Meanwhile, Iran-backed Houthi forces in Yemen claimed responsibility for attacks on Saudi military positions and said they also targeted a Saudi oil tanker operating near the Yanbu export terminal in the Red Sea.

These developments continue to reinforce concerns over the security of key oil transportation routes across the Middle East.

Energy Markets Remain Highly Sensitive

The Strait of Hormuz remains one of the world’s most strategically important maritime chokepoints, handling a significant share of global crude oil and liquefied natural gas exports.

Any restrictions on vessel traffic, whether temporary or permanent, have the potential to affect global energy supplies, increase shipping costs, and add volatility to international oil markets.

Investors are expected to closely monitor both diplomatic negotiations and security developments as policymakers seek to balance regional stability with uninterrupted global energy flows.

Closing Insights

Oil markets remain highly responsive to every development surrounding the Strait of Hormuz, where diplomacy and geopolitical tensions continue to shape expectations for global energy supplies. While hopes for a negotiated solution had recently eased market concerns, Iran’s proposed shipping restrictions and renewed regional security incidents demonstrate that significant risks remain. As negotiations continue, energy markets are likely to experience elevated volatility as traders assess the likelihood of supply disruptions and their potential impact on global crude prices.