The Strait of Hormuz is effectively closed again following weekend attacks on commercial vessels, pushing the fragile U.S.-Iran ceasefire toward collapse and triggering significant market reactions.

Market Impact and Price Volatility

Oil prices surged sharply in response to the renewed tensions. On Sunday, WTI futures rose approximately 7% to nearly $90 per barrel, while Brent crude increased almost 5.8% to $95.59. The upward trend continued into early Asian trading on Monday, with Brent reaching $96.85 per barrel. Concurrently, S&P 500 futures fell about 0.9% as investors reacted to the conflicting messages about the Middle East war and the strait's closure. This surge reversed a prior price plummet on Friday, which had occurred after Tehran announced the strait would be "completely open" for commercial shipping during the remaining ceasefire days.

Escalating Hostilities and Accusations

The closure follows a series of military actions and heightened rhetoric. The U.S. military attacked and seized the Iranian containership Touska in the Gulf of Oman on Sunday. Iran retaliated with drone attacks on American warships in the area. Iran's top joint military command, Khatam al-Anbiya, accused the U.S. of violating the ceasefire through this "armed piracy" and vowed a swift response. Iranian First Vice President Mohammad Reza Aref stated the security of the strait "is not free," linking secure passage for others to unrestricted Iranian oil exports. He framed the choice as between a free oil market for all or significant costs for everyone, asserting that global fuel price stability depends on ending economic and military pressure against Iran and its allies.

Political Rhetoric and Ceasefire Uncertainty

U.S. President Donald Trump reiterated his threat to destroy key Iranian infrastructure—specifically every power plant and bridge—if Iran's leaders do not accept a U.S. deal and extend the ceasefire. The two-week ceasefire, which began after Israel and the U.S. attacked Iran on February 28, is due to end on Wednesday. The initial closure of the strait had already precipitated a global energy crisis, as roughly 20% of global oil and liquefied natural gas exports transit this waterway. Given the weekend's escalation, it is now unclear whether planned second-round negotiations in Pakistan will proceed, as Tehran has stated it will not attend due to unresolved issues including the ongoing U.S. naval blockade and "excessive demands."