Oil surge hits markets, Dow down 500
Oil prices above $94/barrel amid Iran Strait tensions dragged Dow futures down 500 points, pressuring the S&P 500 as VIX rises reported.
Tensions around the Strait of Hormuz are a key factor, as roughly one-fifth of the world's oil supply passes through this waterway. The U.S. and Israel launched missile strikes in late February that killed Iranian leader Ayatollah Ali Khamenei, exacerbating the situation. The conflict has already disrupted fertilizer shipments and is expected to increase food prices, with low-income countries being the most vulnerable. Some analysts are drawing parallels to the 1970s, when Middle East conflict and an Arab oil embargo led to soaring oil prices. Brent crude briefly went above $115 a barrel, while West Texas Intermediate also spiked. Attacks on energy infrastructure, including a drone strike on Saudi Arabia's Ras Tanura refinery, have intensified supply concerns. The VIX, Wall Street's "fear gauge," has risen sharply, reflecting increased market volatility. This is the highest the VIX has been since April 2025. Iran's Revolutionary Guard has stated that it will prevent oil exports from the region to "hostile" parties, further escalating the crisis. Some shipping companies are already avoiding the Strait of Hormuz, which is constraining crude flow from major Gulf exporters.
