U.S. Navy actions in the Strait of Hormuz triggered a sharp rise in oil prices, with Brent crude surging $96 a barrel amid fears of supply disruption. On Sunday, Iran reversed its earlier claim of opening the strategic waterway, attacking Indian-flagged vessels and reasserting control. The U.S. military’s seizure of an Iranian-flagged ship underscored escalating tensions as the eighth-week war approaches a critical cease-fire deadline. Markets reacted swiftly: stock futures signaled a 1% drop in the S&P 500, contrasting Friday’s 3.6% gain. Gasoline prices, though down slightly to $4.05 a gallon, remain 36% higher than war-start levels, reflecting delayed market adjustments.

The conflict’s impact extends beyond crude. Energy Secretary Chris Wright confirmed analysts’ warnings that Americans won’t see prewar gas prices anytime soon. Diesel, already up 48% since the war began, hit $5.56 on Sunday. The Strait of Hormuz, a vital oil chokepoint, remains a focal point. Its closure could compound global supply risks, especially as traders digest developments only now after markets closed Friday. The U.S.-Iran cease-fire, set to expire soon, hangs in the balance after Trump’s delegation to Pakistan failed to secure Iranian participation. This week’s volatility highlights how geopolitical shocks can override recent market optimism.

Investors are grappling with dual pressures: rising oil costs and equities sell-offs. While gasoline prices trailed crude gains by days, diesel’s sharper rise signals supply chain anxiety. Analysts warn that prolonged Strait disruptions could destabilize energy markets further. The market’s reaction underscores vulnerability to regional conflicts, with $96 Brent crude acting as a barometer for both physical supply and investor sentiment. A resolution remains urgent, but with negotiations stalled and military posturing ongoing, short-term volatility is likely. The key question isn’t just price movements—it’s how long the Strait can stay a flashpoint.