Oil jumps $3 as Iran reviews bill to ban US, Israeli vessels from Hormuz

Oil prices on Thursday rose by more than $3 a barrel on news ‌that an Iranian parliament committee is reviewing a bill that would ban US and Israeli vessels from the Strait of Hormuz and fine violators up to a fifth of the value of their cargo.

Brent crude futures gained $3.09, or 3.89%, to $82.54 a barrel by 12:37 p.m. EDT. US West Texas Intermediate futures ​rose $2.49, or 3.31%, to $77.71.

An Iranian lawmaker said a parliamentary committee is reviewing a preliminary bill to ban US, Israeli, and other vessels deemed hostile from the Strait of Hormuz and to fine violators of the proposed restrictions up to 20% of the cargo's value, according to Fars News Agency.

"Crude traders remain focused on the US/Iran agreements, and the longer the delays, ​the more prices will fade back to the upside," said Dennis Kissler, senior vice president of trading at BOK Financial.

Before the Iran conflict began in late February, about one-fifth of global daily oil and liquefied natural gas supplies flowed through the Strait of Hormuz.

Meanwhile, Yemen's Houthis said they carried out missile and drone attacks on "Saudi deployments" in Marib and Hadramout in Yemen on Thursday, and that they killed or wounded hundreds of Saudi-aligned fighters, ​and destroyed military camps, weapons depots and vehicles.

"The market is going up and down as tensions rise and fall, and of course ​these attacks are a significant development because it is more activity in the other theatre, away from the Persian Gulf, and is a reminder ‌that the ⁠Red Sea passageway could still be in jeopardy," said John Kilduff, partner at Again Capital.

Geopolitical risks persist

Gulf countries' crude oil and condensate exports were largely steady in July and remained about 40% below pre-war levels, shipping data showed.

Iran has warned Gulf states that any new US attack on its territory would trigger retaliation against critical energy infrastructure across the region, according to five sources, as Tehran seeks to raise the ​cost of military action by threatening ​Washington's closest regional allies.

The Iran-aligned ⁠Houthis said on Wednesday they had launched a missile attack on a Saudi oil tanker off the coast of the kingdom's Red Sea port city of Yanbu and another missile attack on a Saudi ​oil tanker in the nearby Gulf of Aden. There was no confirmation from Saudi Arabia on ​either incident.

"Houthi attacks ⁠so far have not significantly disrupted oil and gas supply, but this might change if attacks escalate further," said Roberto Cominotto, equity research analyst at Julius Baer.

Saudi Arabia has slightly lowered the official selling price for its flagship Arab Light crude oil to Asia in September, a pricing ⁠document reviewed ​by Reuters showed.

Elsewhere, a major oil refinery in Russia's Yaroslavl region was on fire ​after a big Ukrainian drone attack, and emergency services are working to put out the blaze, Mikhail Evrayev, the regional governor, said on Thursday.