Oil rises amid supply disruption fears following Iran's restrictive draft plan for the Strait of Hormuz

Oil rose Friday amid worries over supply disruptions after Iran published a restrictive draft plan for the Strait of Hormuz .

Futures for international benchmark Brent crude for October delivery gained 1.22% to $83.50 a barrel. U.S. West Texas Intermediate futures for September advanced 1.11% at $78.15 per barrel.

"Higher oil prices signaled that a further inflationary impulse from energy and the situation in the Middle East could not be discounted, sending US dollar higher and government bonds lower," Westpac said in a note.

According to the apparent draft plan published by Iran, the country would ban U.S. and Israeli ships from transiting the Strait. Until compensation is paid, other nations that have harmed Iran would not be allowed to transit, according to the draft.

While Iran and Oman are reportedly working on an agreement to define transit routes in the Hormuz strait, a deal still has not been announced. According to media reports, inbound traffic would transit Iranian waters while outbound traffic would go through Omani waters.

"Adding to supply concerns, Ukraine struck two of Russia's major oil refineries overnight (Yaroslavl/Yanos and Bashneft's Novoil facility), and US imports of Saudi crude dropped to zero in July for the first time since 1985," according to a note by UOB.

Meanwhile, U.S. President Donald Trump said in the Oval Office in a reference to Iran that he thinks the war in Iran will end "pretty soon."

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