The Dow Jones Industrial Average plunged 730 points, closing down 1.5% at 46,687.27 on Thursday, marking its lowest close of 2026 as escalating tensions in the Middle East drove oil prices above $100 a barrel. The S&P 500 also fell sharply, dropping 1.5%, while the Nasdaq Composite declined 1.7%.
The selloff on Wall Street was triggered by fears of a prolonged disruption to global oil supplies following an Iranian blockade of the Strait of Hormuz, a critical shipping route for approximately one-fifth of the world’s oil. Global crude oil prices reached $101 per barrel, a 9% increase from the previous day and a 49% surge over the past month, according to reports.
The surge in oil prices is already impacting consumers, with U.S. Gasoline prices jumping to $3.59 per gallon on Thursday, up from $2.94 a month earlier, data from AAA showed. The price increases are fueling concerns about broader economic fallout and a potential resurgence of inflation.
The crisis in the Strait of Hormuz intensified following reports of an Iranian strike on an oil tanker engaged in ship-to-ship transfers near Basra, Iraq, on March 11th. This incident, coupled with ongoing hostilities, has effectively halted most oil traffic through the waterway, leading to a build-up of crude oil reserves in the region and prompting producers to consider output cuts.
International markets mirrored the downturn in the U.S. Tokyo’s Nikkei 225 index dropped 1.2%, and the pan-European STOXX 600 index slipped 0.5%.
The International Energy Agency (IEA) announced Wednesday it would release 400 million barrels of oil from emergency stockpiles in an attempt to stabilize prices, marking the largest emergency oil release in its history. Although, analysts suggest that a full resumption of oil and natural gas flows from the Persian Gulf is necessary to fully alleviate market pressures.
President Donald Trump has offered mixed signals regarding the administration’s response to the rising oil prices and associated economic challenges. The White House has not yet announced a comprehensive strategy to address the situation.
