Oil prices climbed to near seven-week highs as Iran signaled plans to increase its control over the critical Strait of Hormuz shipping lane.
Iran confirmed it had rejected a 15-point US proposal aimed at ending the ongoing conflict, instead submitting its own set of conditions to negotiators.
Among Tehran’s key demands is formal recognition of its authority over the Strait of Hormuz, a waterway through which a significant portion of the world’s oil supply flows daily.
Iran’s parliament is also drafting legislation that would impose fees on vessels transiting the strait, while requiring ships to provide detailed clearance information before passage.
The move represents a significant escalation in tensions between Iran and Western powers, rattling energy markets already sensitive to geopolitical disruption in the region.
US Vice President JD Vance stated that the United States would not hold talks with Iran unless Tehran stopped attacking commercial shipping in the Strait of Hormuz.
Vance’s comments underscored the hardening position in Washington as diplomatic efforts appear to stall amid competing demands from both sides.
ING analysts offered a measured take on the price rally, cautioning that momentum may not hold if physical shipments through the strait continue without major disruption.
“Escalation is propping up crude, but the rally may lose traction if Hormuz shipments keep moving smoothly,” ING analysts said, highlighting the gap between market fear and operational reality.
Lower US commercial crude inventories provided additional support to oil prices, adding a domestic supply dimension to an already complex global picture.
Energy traders are watching the Hormuz situation closely, as any sustained disruption to traffic through the narrow waterway could send prices sharply higher in a short period.
The strait is one of the world’s most strategically important energy chokepoints, with millions of barrels of oil passing through it each day from major Gulf producers.
Iran’s decision to reject the US framework and assert greater control over Hormuz marks a notable shift in the country’s negotiating posture at a critical moment.
Markets remain on edge as both diplomatic and military pressures continue to build around one of the most consequential waterways in global energy trade.
