Oil prices surged again Thursday, with Brent crude trading above $96 a barrel and analysts warning of potential triple-digit prices ahead, as the Strait of Hormuz—the world's most critical energy shipping corridor—remained effectively closed to tanker traffic amid an escalating U.S.-Israeli military campaign against Iran.
Iran's newly installed supreme leader, Ayatollah Mojtaba Khamenei, publicly rejected any ceasefire talks, and U.S. intelligence officials confirmed that Tehran has begun laying naval mines in the narrow waterway, a development described by market strategists as a significant escalation. The U.S. Navy on Tuesday destroyed 16 Iranian minelayers near the strait, but acknowledged it is not yet equipped to begin escorting commercial tankers through the passage.
The S&P 500 fell 1.3% on Thursday, hitting its lowest close since last November, while the Dow Jones Industrial Average dropped roughly 1%, led by steep declines in Goldman Sachs (-3.71%), Caterpillar (-3.54%), and Boeing (-2.91%). The energy sector was the sole gainer, extending its year-to-date outperformance as investors rotated aggressively into upstream producers, refiners, and integrated majors.
According to the International Energy Agency, export volumes of crude and refined products through the Strait of Hormuz are currently running at less than 10% of pre-war levels, representing a supply disruption that analysts at Rapidan Energy Group describe as the largest in recorded history. Approximately 20 million barrels per day of crude oil and oil products typically transit the waterway, accounting for roughly 25% of the world's seaborne oil trade.
Wells Fargo double-upgraded Occidental Petroleum (OXY) to Overweight with a $69 price target, citing improved Permian Basin productivity and the potential for the company to redeem preferred shares in the second half of 2026 should elevated oil prices persist. The iShares Global Energy ETF (IXC) has gained roughly 27% since the conflict began on February 28.
Treasury yields rose across the curve as elevated energy prices stoked inflation expectations. The dollar continued to strengthen on safe-haven flows, with EUR/USD falling below 1.16. Airline stocks were among the session's hardest-hit groups, with Delta Air Lines, American Airlines, and United Airlines each declining sharply on fuel cost concerns. Defense contractors including RTX, Northrop Grumman, and Lockheed Martin held firm amid continued military spending tailwinds.
Calls for $200 oil in a worst-case scenario—should Iran deploy its estimated stockpile of 6,000 naval mines—have begun circulating among institutional desks. "The strategic reserves are not a permanent solution, and crude oil will continue to trade like a meme stock until the solution is peace," Macquarie analysts wrote in a note Thursday, echoing a growing consensus that only a ceasefire or military degradation of Iran's attack capabilities can sustainably reduce prices.