Oil rises as Iran weighs ban on US Israeli ships

Oil prices rose on Friday, August 7, as renewed uncertainty over the fate of a critical Middle Eastern shipping route overshadowed earlier optimism for a diplomatic resolution. Brent crude futures settled at $83.55 a barrel, a gain of 1.3 percent, while U.S. West Texas Intermediate futures finished at $78.18 a barrel, up 1.15 percent. The gains followed reports that Iran is reviewing legislation to ban American and Israeli vessels from the Strait of Hormuz, a vital waterway through which roughly one-fifth of the world's oil and liquefied natural gas normally flows.

The price increase reversed a mid-week decline driven by hopes that Iran and Oman were nearing an agreement to restore normal traffic through the strait, which has been heavily constrained since a conflict involving the U.S., Israel, and Iran began in late February. However, market sentiment shifted following news that Iran's Revolutionary Guard conducted operations against what it termed hostile targets near the strait on Thursday evening. Concurrently, a parliamentary committee in Tehran began examining a draft bill that would prohibit U.S. and Israeli-linked ships from transiting the passage and impose penalties...