The oil alarm is ringing. Stocks slide and crude prices rocket as the Iran war continues

Ten days into the U.S. war against Iran, the oil shock has arrived. Over the weekend, U.S. stock market futures fluctuated deep into negative territory. On Monday, the major indexes tumbled more than 1% heading into the market open, with the S&P 500 down 1%, the Dow preparing to open down by 575 points, and Nasdaq $NDAQ futures off about 1.2%.

The trigger? A Strait of Hormuz that is, for all practical purposes, closed — for the first time in history. Regional producers have begun curbing output due to security concerns and export constraints; with storage tanks full, there is nowhere left to house the quantities that haven’t yet shipped.

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The Strait normally carries about 20% of the world’s oil. Since the war began, traffic had fallen as low as 15% of usual flows, with ships in the region receiving messages from Iranian naval sources that warned them not to enter, and an Iranian drone attacks hitting a Maltese oil tanker in the Strait on Saturday.

JPMorgan $JPM Chase analyst Natasha Kaneva told The Wall Street Journal: “In the whole written history of the strait, it has never been closed, ever. To me, it was not just the worst-case scenario. It was an unthinkable scenario.”

“We are looking at what is by far the biggest disruption in world history in terms of daily oil production,” author and historian Daniel Yergin further told The Journal. “If it goes on for weeks, it will reverberate across the global economy.”

Meanwhile, West Texas Intermediate crude futures have rocketed 70% in a little over one week — the biggest gain in the history of the futures contract. Crude is up nearly 77% in 2026, having spent recent months trading below $70.

The scenario is already rippling through to U.S. consumers and politics. “The domestic implications in the U.S. are huge, with experts predicting we may see $4 and perhaps $5-a-gallon gas prices within weeks,” Politico reported over the weekend. “And this in a country where the cost of living is already the hottest political issue in a midterm year.”

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