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Oil Surges Past $100 on War Fears, Strait of Hormuz Threat
13 Mar
Summary
- Brent Crude surpassed $100 a barrel, a first since 2022.
- Iran's leader threatened to close the Strait of Hormuz.
- US stock indices hit their lowest points of 2026 amid rising oil prices.
Brent Crude oil prices have again surpassed the $100 per barrel mark, a level not seen since 2022. This surge is fueled by overnight attacks on ships in the Persian Gulf and inflammatory comments from Iran's new Supreme Leader, Mojtaba Khamenei. Khamenei stated that the Strait of Hormuz should be closed to pressure the enemy, escalating geopolitical tensions.
In response to the rising oil prices and concerns over the conflict in West Asia, benchmark indices on Wall Street experienced a sharp decline on Thursday. The Dow Jones fell over 700 points, closing below 47,000 for the first time in 2026. The S&P 500 and Nasdaq also saw significant losses, ending the day 1.6% and 1.8% lower, respectively, marking their lowest points of the year so far.
Adding to the market's distress is the strain within the $1.8 trillion private credit market. Morgan Stanley announced it is capping redemptions on one of its private credit funds, leading to a more than 4% drop in its stock. The KBW Bank index also fell 2.5%, extending a streak of declines.
The US Dollar index strengthened to a two-month high, nearing 100, while the 30-year treasury note yield climbed to 4.9% due to war cost anxieties. Despite an increase in yields, a $22 billion auction of these notes saw strong demand.
Future trading on Wall Street indicates a modest rebound this morning. Investors are awaiting key economic data, including the PCE inflation report, revised Q4 GDP figures, and January consumer spending data. The PCE is closely watched as the Federal Reserve's preferred inflation indicator.
