As U.S.-Iran hostilities reignite and escalate, international oil prices have recently resumed their upward trajectory, now approaching the $100-per-barrel mark and emerging as the top risk facing U.S. equities.
On Wednesday's Asian session, as the Middle East conflict continued to escalate, the international crude oil benchmark…$Brent Last Day Financial Futures (DEC6) (BZmain.US)$Prices have once again climbed above $99 per barrel, marking a cumulative increase of nearly 40% since the U.S.-Israel–Iran conflict erupted in late February.
On the news front, following Iran's attack on U.S. Navy vessels, the U.S. military launched an airstrike against Iranian oil tankers on Tuesday. In retaliation, Iran struck U.S. military bases in Jordan.
The impact of oil prices rebounding toward their year-to-date highs has already been felt in U.S. domestic gasoline prices. Over the past month, this price surge has dealt a severe blow to consumer discretionary stocks and weighed on industrial companies that rely on oil as a critical input cost.
The anticipated impact of oil prices on inflation has also pushed U.S. Treasury yields higher, posing another challenge for the stock market. On Tuesday, the yield on the 10-year U.S. Treasury note rose to 4.805%, marking its highest closing level since October 2023.
Yields move inversely to bond prices. Treasury yields influence corporate borrowing costs; when yields are high, the attractiveness of riskier assets such as stocks declines.
The impact of the sharp surge in oil prices has already begun to show up in the U.S. stock market. On Tuesday, as both oil prices and U.S. Treasury yields rose, the three major U.S. stock indexes all declined. At the close,$Dow Jones Industrial Average (.DJI.US)$Down 1.18%, at 52,786.07 points;$S&P 500 Index (.SPX.US)$Down 0.58%, at 7,673.52 points;$Nasdaq Composite Index (.IXIC.US)$Down 0.32%, at 26,421.41 points.
"If geopolitical tensions fail to ease, progress in combating inflation is likely to reverse,"$Interactive Brokers (IBKR.US)$Senior economist José Torres stated.
Investment banks are纷纷 raising their oil price forecasts.
In a report released on Tuesday, Kim Fustier, HSBC's senior global oil and gas analyst, stated that her latest baseline scenario assumes a tacit understanding will be reached between the United States and Iran, though this arrangement would be fragile and prone to repeated breakdowns.
She stated that, as the industry gradually adjusts to elevated risk levels, shipping traffic through this critical maritime chokepoint will improve only slowly. She added that by year-end, liquid fuel shipments through the Strait of Hormuz are expected to rise from the current 6 million barrels per day to 8 million barrels per day, and further increase to 9.5 million barrels per day by mid-next year. By comparison, prior to the outbreak of hostilities, roughly 20 million barrels of fuel passed through the Strait of Hormuz each day.
"This means the period of tight market supply and demand will be longer than we had previously anticipated," Fustier said. She raised her forecast for this year's Brent crude oil price from the previous $80 per barrel to $90 per barrel.
Analysts at Goldman Sachs and the Bank of America have also raised their forecasts for Brent crude oil prices.
"If a small-scale conflict restricting oil supplies persists through year-end, Brent crude could trade in a range of $95 to $120 per barrel. Meanwhile, should a broader conflict erupt and result in significant damage to energy infrastructure, oil prices could surge as high as $150 per barrel," Bank of America analysts wrote.
Goldman Sachs recently raised its 2026 Brent/WTI crude oil price forecasts by $5 to $85/$80, and its 2027 forecasts to $80/$75.
For several weeks, shipping traffic through the Strait of Hormuz has remained extremely subdued. According to preliminary data from Kpler, only nine bulk‑cargo vessels transited the waterway on Monday. By contrast, in late June—following the signing of a preliminary peace agreement between the United States and Iran—the daily average was around 30 vessels, while in the ten days leading up to the outbreak of hostilities, that figure approached 100.
The energy sector of the S&P 500 has posted year-to-date gains of more than 40%, as oil producers benefit from higher oil prices.$Marathon Petroleum (MPC.US)$The stock closed at a record high of $397.77 on Tuesday.
Edited by melody