Oil prices rose Monday as tensions between the United States and Iran intensified following the U.S. seizure of an Iranian-flagged cargo vessel attempting to bypass a blockade of Iranian ports. The price of Brent crude, the international benchmark, increased 5.1 per cent to $94.98 per barrel amid concerns that Iran could restrict oil shipments through the Strait of Hormuz. This marks a reversal from Friday's market surge, when oil prices fell and U.S. stocks climbed after Iran announced it was reopening the strait to commercial traffic. That relief was short-lived, as Iran reinstated restrictions on the waterway Saturday after the U.S. moved forward with its port blockade. The S&P 500 dropped 0.4 per cent from its record high, marking its second decline in 14 trading days, while the Dow Jones Industrial Average fell 115 points, or 0.2 per cent, by 11 a.m. Eastern time. The Nasdaq composite declined 0.7 per cent. A ceasefire agreement between the U.S. and Iran is set to expire Tuesday at 8 p.m. Eastern time, raising uncertainty about the conflict's next phase. Brent crude had previously reached over $119 per barrel at the peak of war-related fears but remains below that high. Despite the geopolitical volatility, the S&P 500 continues to trade above pre-war levels, supported by strong corporate earnings. Approximately 10 per cent of S&P 500 companies have reported first-quarter 2026 results, with nearly 90 per cent exceeding profit expectations, according to FactSet. Morgan Stanley strategists, led by Michael Wilson, stated, "Despite geopolitical risks, the earnings recovery remains intact." Companies sensitive to fuel costs were among the day's biggest losers, with Norwegian Cruise Line Holdings down 5.1 per cent, Carnival slipping 1.4 per cent, United Airlines falling 2.4 per cent, and American Airlines dropping 5 per cent after it rejected a merger with United. TopBuild surged 16.4 per cent after QXO announced a $17 billion acquisition, though QXO's stock fell 8.2 per cent.
The U.S. seizure of an Iranian vessel and Tehran's subsequent closure of the Strait of Hormuz show how quickly fragile de-escalations can collapse, even after public declarations of openness. With the ceasefire set to expire within 24 hours and oil prices reacting sharply, the window for diplomatic continuity is narrowing. The resilience of U.S. corporate earnings has so far shielded markets from deeper turmoil, but sustained disruption in the Persian Gulf threatens that buffer. No mention of African or Nigerian involvement suggests the region remains a passive observer to decisions that could still impact global energy costs.
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