Stock futures slide as oil jumps ahead of Strait of Hormuz blockade
U.S. stock futures were lower Monday morning, while oil prices jumped sharply, as markets digested President Trump’s plan to blockade Iran’s ports and a partial blockade of the Strait of Hormuz.
The move has traders watching the risk of escalation around one of the world’s most important shipping routes. Oil prices climbed above $100 a barrel, with Brent crude rising $7.15, or 7.5%, to $102.30 a barrel. West Texas Intermediate, the U.S. benchmark, rose more than 7% to $104.20, according to Oilprice.com.
Dow futures pointed to a loss of 477 points, or 1%, ahead of the 9:30 a.m. ET market open. Futures for the S&P 500 and the tech-heavy Nasdaq composite indices pointed to losses of about 0.7%.
Mr. Trump said the U.S. blockade of Iran’s ports will begin at 10 a.m. ET Monday, after negotiations in Islamabad over the weekend failed to produce a peace agreement in the U.S.-Iran war. The timing matters in markets—oil reacts fast, and this kind of news lands like a jolt. Even if it’s still early, you can almost feel the tension in the opening bids.
Because Iran exports much of its oil to China, the blockade could be aimed at putting added pressure on Tehran while also pushing Beijing to play “a more active role in mediating a ceasefire,” according to Misryoum newsroom reporting. But Misryoum analysis indicates the strategy could also create new flashpoints. In a research note, Capital Economics group chief economist Neil Shearing warned that the blockade risks escalation—raising questions about whether the U.S. Navy would seize allied ships that have paid tolls to Tehran, or whether it would target Chinese vessels in the Strait.
Oil prices have been climbing as shipping through the strait has largely stalled since late February. Brent crude had moved from around $70 per barrel before the war began in late February to more than $119 at times, and that surge has helped push U.S. gas prices above $4 a gallon, pinching household budgets. One of the more immediate signals people feel at home isn’t abstract—drivers paying at the pump, hearing the click of the nozzle, smelling that faint gasoline smell that somehow still feels too normal for the price.
Even with futures pointing down, Misryoum editorial desk noted that the losses weren’t as severe as some had feared after the weekend negotiations failed. Adam Crisafulli, an analyst with Vital Knowledge, said in a research note that the Hormuz blockade “in reality isn’t as draconian as it initially appeared.” He argued the U.S. Navy is focused on interdicting ships traveling to or from Iranian ports, not all vessels moving through the waterway. U.S. Central Command said the U.S. Navy won’t stop vessels heading through the strait to and from non-Iranian ports.
The Strait of Hormuz remains a critical chokepoint: about 20% of the world’s energy supplies are shipped through it. Traffic has been significantly curtailed since the war began in late February. Misryoum newsroom reporting says that, in April, an average of about 10 ships passed through the Strait each day—down sharply from roughly 129 ships that traveled through the waterway in the month before the war, based on marine transit data.
It’s a complicated situation, and markets are still trying to figure out how “partial” the blockade really is—whether it stays contained, or if one seizure triggers another, and then another. And for investors, that uncertainty is enough to hit futures even before the day fully starts.
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