Oil prices climb as US-Iran tensions return focus to Strait of Hormuz shipping

Oil prices rose on Monday as tensions increased between the United States and Iran. The gains were smaller than earlier moves during the war. Brent crude, the global benchmark, climbed 5.6% and settled at $95.48 a barrel. Traders watched the Strait of Hormuz closely, due to risks to tanker traffic.

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US share markets eased after a recent record run. The S&P 500 fell 0.2% and logged its second decline in 14 days. The Dow Jones Industrial Average slipped 4 points, or under 0.1%. The Nasdaq composite dropped 0.3%. The pullback followed reports of a US seizure at sea.

United States and Iran tensions lift oil prices

The United States said it seized an Iranian-flagged cargo vessel. US officials said the ship tried to evade a blockade of Iranian ports. Oil traders focused on whether Iran could keep supplies trapped. The concern was that Iran may block tankers leaving the Strait of Hormuz.

Markets had swung sharply late last week on changes in shipping access. On Friday, Iran said it was reopening the strait to commercial traffic. Stocks then surged and oil prices fell. Sentiment shifted again after Iran closed the strait on Saturday. That followed a US decision to continue its port blockade.

Another deadline was approaching on Tuesday night at 8 p.m. Eastern time. That was early Wednesday in Tehran. A ceasefire agreement between the United States and Iran was due to expire then. Investors weighed whether a deal could still emerge. Oil prices stayed below earlier war peaks.

Brent crude previously rose briefly above $119 per barrel at the height of fears. Even so, the S&P 500 remained above its pre-war level. Monday’s smaller shifts suggested markets still saw a path to agreement. Ending the war would support economic interests in both countries, analysts said.

United States and Iran tensions hit travel stocks and airlines

Companies with high fuel costs slid as crude became more expensive. Norwegian Cruise Line Holdings dropped 3.5%, and Royal Caribbean Group lost 1.1%. United Airlines sank 2.8%. American Airlines fell 4.2% after American said its not interested in a merger with United.

United States and Iran tensions compete with earnings optimism

TopBuild rose 19.4% after a takeover deal. QXO agreed to buy the insulation and building products distributor. The deal was valued at roughly $17 billion. QXO shares fell 3.1%. QXO said the deal would make it the continents second-largest publicly traded building products distributor.

By the close, the S&P 500 fell 16.92 points to 7,109.14. The Dow declined 4.87 to 49,442.56. The Nasdaq composite slid 64.09 to 24,404.39. Recent strength has been tied to strong first-quarter 2026 profits. Investors also expected further earnings growth.

Big US banks reported results above forecasts last week. They also said the US economy looked resilient. Banks pointed to steady spending by US consumers. Morgan Stanley strategists led by Michael Wilson said the earnings recovery remained intact despite geopolitical risks. Analysts even lifted profit forecasts for spring 2026.

About 10% of S&P 500 companies had reported early-2026 results. Nearly nine in 10 beat analysts’ profit estimates, according to FactSet. If the rest meet forecasts, earnings per share would be 13% higher than a year earlier. UnitedHealth Group reports Tuesday, Tesla Wednesday, and Procter & Gamble Friday.

Outside the United States, markets were mixed. European indexes fell after a firmer finish in Asia. Germany’s DAX lost 1.2%. Hong Kong’s Hang Seng added 0.8%. Investors continued to track United States and Iran developments alongside company earnings, as the ceasefire deadline drew closer.

With inputs from PTI