Citing a report from Iran's Fars News Agency, Iranian authorities are reportedly drafting a strategic plan that would significantly tighten control over transit through the Strait of Hormuz, restricting access for vessels linked to the United States, Israel, and other countries Iran considers hostile. The Strait of Hormuz is one of the world's most critical energy chokepoints, with roughly a fifth of global oil consumption passing through it daily, meaning any disruption to traffic there would have immediate implications for worldwide energy supply chains.

Key Provisions of the Proposed Plan

Under the proposed framework, the following restrictions would be imposed:

• U.S., Israeli, and other designated "hostile" vessels would be prohibited from transiting the Strait of Hormuz.
• Ships connected to Israel, whether military or civilian, would be barred from passage.
• Vessels or cargoes supporting actions against what Iran terms the "Resistance Front" would also be banned.
• Countries or entities accused of causing damage to Iran could be denied access to both the Strait of Hormuz and the broader Persian Gulf until compensation is paid.
• Violators could face heavy fines of up to 20% of the cargo's value, with cargo potentially subject to seizure.
• Iranian authorities, working in coordination with the military, would oversee navigation, vessel monitoring, and security operations in the Persian Gulf.

The plan echoes threats Iran has made periodically over the years to close or restrict the strait during periods of heightened tension with Washington and its allies, though none of those past threats have been fully carried out.

Plan Not Yet Official

The document reportedly remains in the expert review stage and has not yet become official policy. Its final scope and implementation timeline remain uncertain, as the plan has not been formally approved or enacted. Under the United Nations Convention on the Law of the Sea, the Strait of Hormuz is designated as an international strait, meaning all ships and aircraft enjoy the right of transit passage; any attempt by Iran to selectively block vessels would likely face legal and diplomatic challenges from multiple countries.

Oil Prices React

Following the report, oil prices moved higher, with crude trading up $2.64, or 3.45%, at $77.87. On the daily chart, crude oil had fallen and closed below its 200-day moving average over the previous two trading days before rebounding back above that level, which sits at $76.12. Sustaining a position above the 200-day moving average would tilt the technical bias back to the upside following the failed breakdown. The next upside technical targets are the 100-hour moving average at $78.44, followed by the 200-hour moving average at $80.67.