U.S.- and Israeli-linked vessels would be barred from transiting the Strait of Hormuz under a draft proposal reported by Iran’s state-affiliated Fars News Agency, sending oil prices sharply higher as traders concluded that the Trump administration’s effort to restore unrestricted commercial shipping may face a significant new obstacle.

U.S. West Texas Intermediate crude jumped more than 3% to around $78 a barrel, while Brent crude climbed nearly 4% above $82 after the proposal became public, reversing three consecutive sessions of declines fueled by optimism that Washington was nearing a breakthrough to restore commercial navigation through the world’s most important energy chokepoint.

The proposal immediately shifted attention from whether Hormuz would reopen to who would actually be allowed to use it.

The proposal, which remains under review and has not been adopted, would prohibit U.S.-flagged vessels from using the Strait of Hormuz. It would also block Israeli ships and commercial cargo linked to Israeli businesses. Beyond those restrictions, ships from countries Iran considers responsible for wartime damage could be denied passage unless compensation is paid, with penalties reportedly reaching as much as 20% of a violating vessel’s cargo value.

Unlike the separate Iran-Oman discussions over shipping procedures and traffic management, this proposal focuses on eligibility—who would actually be permitted to transit the waterway. Together, the two tracks raise the possibility that commercial shipping could resume without restoring equal access for American and Israeli interests.

That creates a direct collision with Washington’s publicly stated objective.

Throughout the week, Treasury Secretary Scott Bessent said negotiations aimed at restoring commercial shipping through the Strait of Hormuz were progressing and suggested an agreement could come within days. President Donald Trump likewise indicated an announcement could be imminent as the administration sought to restore freedom of navigation after months of disruption.

Iran’s proposal presents a fundamentally different framework.

Rather than restoring unrestricted commercial access, the draft would allow Iran to determine which countries and companies may use one of the world’s busiest maritime corridors. If implemented in its current form, American and Israeli shipping interests would remain excluded even if commercial traffic resumes for others.

A framework that restores shipping while excluding U.S.-flagged vessels would fall well short of the free-passage objective Washington has publicly promoted and would likely become one of the central issues in any broader understanding between the United States and Iran.

For businesses, the consequences extend far beyond geopolitics.

The Strait of Hormuz normally carries roughly one-fifth of the world’s oil and liquefied natural gas exports. American importers could increasingly depend on third-country carriers to move cargo through the Gulf, raising freight costs, insurance premiums and delivery times. Israeli-linked cargo would continue carrying elevated geopolitical and security risks, costs that shipping companies and insurers would likely pass through global supply chains.

Businesses importing energy, chemicals, manufactured goods and consumer products could ultimately see higher transportation expenses, with part of those costs eventually reaching consumers through higher prices.

Financial markets wasted little time reacting.

After three sessions of falling oil prices on expectations that a shipping agreement was close, traders quickly reversed course following reports of the Iranian proposal. The sharp rebound reflected growing skepticism that any eventual arrangement would restore unrestricted access for all commercial shipping.

The proposal also underscores the continuing gap between Washington’s expectations and Tehran’s public messaging. While U.S. officials have spoken about restoring commercial navigation, Iranian officials continue to maintain that shipping arrangements are being negotiated with Oman rather than directly with the United States. The latest proposal reinforces Tehran’s position that, even if commercial traffic resumes, it intends to retain broad authority over which nations ultimately benefit.

The central question is no longer whether Hormuz reopens—but whether it reopens equally for everyone.

The proposal remains under review and could still be amended, delayed or rejected before becoming law.

For businesses, investors and consumers, Thursday’s market reaction served as a reminder that oil prices—and ultimately transportation and consumer costs—remain highly sensitive not simply to whether a Hormuz agreement is reached, but to whether that agreement delivers the unrestricted freedom of navigation the Trump administration has been seeking.

JBizNews Desk | Wall Street

© JBizNews.com All Rights Reserved. Reproduction or distribution without written permission is prohibited.