Wall Street is watching closely as US oil prices remain elevated heading into the third week of the Iran war, with another volatile session expected on Monday. Analyst Patrick De Haan has projected pump prices of $3.80 to $3.85 per gallon for the day, while $4 gasoline remains within reach. The intersection of military conflict and financial markets has made US oil prices one of the most closely watched economic indicators in the country.
The conflict that is keeping Wall Street on edge began on February 28 when the US and Israel launched coordinated strikes against Iran, setting off a chain of supply disruptions that has pushed the national gasoline average 23% higher from below $3 to $3.70 per gallon. Wall Street has been forced to recalibrate its economic models to account for an energy shock that has proven more persistent and severe than most analysts initially projected. Each new development in the conflict moves both oil prices and stock market sentiment simultaneously.
The US strike on Kharg Island on Friday sent fresh signals to Wall Street that the conflict’s impact on oil supply is far from over. Iran’s blockade of the Strait of Hormuz has maintained the removal of roughly one-fifth of global daily oil supply from international markets. Brent crude oscillated between $103 and $106 per barrel Monday, while US crude held near $94 after briefly reaching $100 on Sunday. Wall Street’s reaction was mixed, with oil company stocks surging while broader market sentiment remained cautious.
California’s average pump prices above $5 per gallon and Los Angeles stations charging over $8 are among the data points that Wall Street analysts are monitoring for signs of consumer stress. Diesel for commercial transport could reach $5.15 per gallon nationally. Exxon CEO Darren Woods, along with leaders at Conoco and Chevron, has briefed White House officials on supply risks, with Woods flagging the potential for speculative market activity to amplify the oil price signals that Wall Street is watching.
The S&P 500 gained roughly 1% Monday morning following a brief retreat in crude prices. Major oil company stocks have reached record highs since the conflict began. Wall Street will continue to watch US oil prices closely for signals about the conflict’s trajectory and the broader economic implications of a prolonged energy supply crisis.