Oil nears $100 as Iran-US tensions rattle global markets

Oil prices pushed closer to $100 a barrel as renewed strikes between the United States and Iran rattled markets and dented hopes for any near-term peace deal. The move exposed how little room investors see between a contained flare-up and a broader energy shock: Wall Street indexes fell, European stocks were mostly lower and the dollar firmed as traders reassessed the risk to crude flows through the Strait of Hormuz.

The latest escalation came after a drone strike on a passenger terminal at Kuwait International Airport killed one person and wounded dozens, intensifying pressure on a two-month cease-fire. Iranian Foreign Minister Abbas Araghchi said there had been “no tangible progress” in talks to end the war, a warning that diplomacy was failing to keep pace with the violence. Analysts said the conflict was shifting from a fragile pause into a low-intensity confrontation, one that could keep markets on edge without fully shutting the door on more severe disruption.

That distinction matters because traders are not only reacting to the day’s price move. They are pricing in the chance that attacks spread to shipping routes, that Gulf energy exports are interrupted and that a cease-fire loses credibility fast. Wood Mackenzie said a prolonged closure of the Strait of Hormuz would be the greatest single risk to energy markets today, and its analysts have modeled three scenarios for oil, liquefied natural gas and the global economy. The OECD added to that warning, forecasting world growth at 2.8 percent this year even if Gulf energy exports returned to pre-conflict levels in the third quarter.

The market’s sensitivity was already clear in June 2025, when Israel launched military strikes on Iran and Iran fired missiles at Israel. Brent crude briefly jumped more than 13 percent before settling 7 percent higher at $74.23 a barrel, while U.S. crude finished at $72.98. The Dow Jones Industrial Average fell 1.8 percent, the S&P 500 lost 1.1 percent and the Nasdaq Composite dropped 1.3 percent, while gold climbed to $3,431 an ounce, close to its record high of $3,500.05.

Sameer Samana of Wells Fargo Investment Institute said the return of major conflict in the Middle East should bring sharper geopolitical stress and much higher oil prices. James Rossiter of TD Securities said the reaction reflected a flight to safety and a more hawkish Federal Reserve outlook if the oil shock persists. For markets, the danger is no longer only a one-day spike in crude. It is the risk that war in the Middle East turns energy inflation back into a global macro problem.