A motorboat cruises off the coast of the United Arab Emirates, on the Strait of Hormuz, with a tanker seen in the background, on February 25, 2026. Tanker traffic through the strait has come essentially to a stop after Iran declared the strait closed following attacks on Iran by the U.S. and Israel.
Fadel Senna/AFP via Getty Images
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Fadel Senna/AFP via Getty Images
Global crude oil prices surged by approximately 8% and stocks declined as the conflict with Iran entered its third day.
Brent crude, the global benchmark, was trading in the high $70s on Monday morning after the effective halt of tanker traffic through the Strait of Hormuz.
This sharp increase from before the U.S. and Israel’s attacks, but still far from a worst-case scenario. Analysts have cautioned that prices could exceed $100 a barrel if oil trade is disrupted for an extended period or if the conflict spreads to neighboring countries and damages oil infrastructure. Saudi Arabia reports shooting down drones targeting an oil refinery, while Qatar Energy confirms attacks on two natural gas facilities.
Stock markets initially declined but recovered some losses by midday as investors adopted a wait-and-see approach. The Dow Jones Industrial Average dropped up to 600 points at one stage on Monday morning but was down by just over 10 points by midday. Meanwhile, both the S&P and the Nasdaq showed slight gains.
Gasoline prices likely to rise; natural gas spikes
Global energy markets were closed on Saturday when the U.S. and Israel launched attacks on Iran. Upon opening on Sunday night, prices briefly surpassed $80 a barrel before stabilizing.
Patrick de Haan, an analyst with GasBuddy, predicts that the spike in crude oil prices will lead to a 10-30 cent increase in U.S. gasoline prices on average in the coming days, with some stations seeing prices rise by as much as 85 cents.
Approximately 20% of global oil consumption goes through the Strait of Hormuz. Since the conflict began, four vessels have been targeted in Gulf waters, causing shipping companies and insurers to be concerned about vessel safety, resulting in tankers avoiding passage through the Strait.
Furthermore, the Strait is a critical chokepoint for the trade of liquefied natural gas (LNG) ā the gas used for heating and electricity production, loaded onto ships for easier global trade. European natural gas markets have surged over 20%.
Following recent investments in LNG terminals, the U.S. has become the largest exporter of LNG in the world. Higher prices benefit companies exporting natural gas overseas but contribute to increased electricity costs in the U.S.
NPR’s Rafael Nam and Aya Batrawy contributed to this report.
