Dow futures plunged over 1,000 points Sunday night as oil prices surged past $100 a barrel for the first time since 2022. The sell-off was triggered by escalating U.S.-Iran tensions and the closure of the Strait of Hormuz, a critical oil chokepoint. West Texas Intermediate crude jumped 26.5% to $114.9, posting its largest weekly gain in futures trading history. As Wall Street braces for a turbulent Monday open, analysts warn oil could reach $150 if the Strait remains closed.
Global markets are facing severe turmoil as escalating Middle East conflict disrupts energy supplies. Dow futures fell 1,026 points, while S&P 500 and Nasdaq 100 futures also dropped over 2%, pointing to one of the worst Monday opens in months.
This chaos is directly driven by the closure of the Strait of Hormuz after Iranian drone threats. Approximately 20% of global oil supply moves through this narrow waterway, and the disruption has now persisted for nine days.
Iraq, Kuwait, and the UAE all announced output cuts over the weekend as storage tanks reached capacity. Iraq’s southern oilfields saw production drop 70% to just 1.3 million barrels per day, down from 4.3 million before the war.
The West Texas Intermediate crude oil price has soared, jumping 35% last week alone. Analyst Homayoun Falakshahi, lead crude research analyst at Kpler, stated “Oil could rise to $150 a barrel by the end of March if travel through the strait doesn’t start flowing again.”
Officials have attempted to downplay the economic alarm surrounding the price spike. President Donald Trump shared on Truth Social that short-term oil prices are “a very small price to pay for U.S.A., and World, Safety and Peace.”
Energy Secretary Chris Wright echoed this sentiment, suggesting higher prices would last weeks, not months. The U.S. national average for a gallon of gasoline has already climbed 14% in a week.
Market analysts remain deeply concerned about the broader fallout. Rick Rieder, BlackRock’s CIO, wrote to clients that markets are jittery due to the uncertain impact and duration of the war.
Patrick De Haan, head of petroleum analysis at GasBuddy, said the odds of gasoline hitting $4 a gallon in the next month now stand at 80%. Dow futures face a heavy week of economic data, with each report carrying extra weight amid the ongoing crisis.
