Brent touched $126, then pulled back
Brent crude hit an intraday high of $126.41 a barrel before easing to about $116.60 as trading volumes thinned. That is the highest price since 2022.
WTI, the US benchmark, traded near $115 at the peak before sliding back. It is the ninth straight day of gains for global oil prices.
Trump weighs short, powerful strikes
Trump's national security team gave him several options this week for the Hormuz crisis. Axios reported the US is weighing a wave of "short and powerful" strikes on Iran. Deutsche Bank called that report the main trigger for the overnight spike.
Trump also told aides to plan for a longer blockade. Tehran's offer to reopen the Strait was rejected. The White House wants a full nuclear deal, not a partial one.
Iran says Hormuz stays under its control
Iran's supreme leader said today that Tehran will not give up control of the Strait of Hormuz. That kills the latest backchannel proposal floated earlier in the week.
Goldman Sachs estimates exports through Hormuz are now running at just 4% of normal levels. The IEA still calls this the largest oil supply disruption on record.
US gas prices hit a four-year high
AAA pegs the US average price of regular gasoline at $4.30 a gallon today. That is up 27 cents, or 7%, in the last week alone. It is the highest national average since 2022.
Diesel and jet fuel are climbing faster. That feeds into shipping costs and food prices over the next 30 to 60 days.
What it means for stocks
Energy stocks led the tape today. The S&P 500 energy sector is the only sector up year to date. Big integrated names like Exxon, Chevron, and ConocoPhillips have all set new highs this month.
Defense names also caught a bid on the strike headlines. Lockheed Martin, Northrop Grumman, and General Dynamics each gained on the day. Airline and cruise stocks fell on the jet fuel pop.
Bonds rallied as a flight-to-safety bid hit the long end. The 10-year yield slipped back under 4.20%. Gold pushed to a fresh record above $3,650 an ounce.
What to watch next
Three things matter from here. First, whether Trump signs off on strikes or backs off. Second, any sign Iran tries to interdict tankers or US Navy assets. Third, the next OPEC+ statement on extra barrels.
Markets are still underpricing a multi-month war, according to several Wall Street strategists. A move to $130 to $140 oil is now back on the table if strikes happen this week.
Takeaway
Oil at $126 is no longer a tail risk. It is the base case while the war drags on. Energy and defense names have led for nine weeks running.
Watch the headlines on US strike decisions before the weekend. Any confirmation pushes oil and energy stocks higher and pulls the rest of the market down with them.
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