Dow Jones Futures, Oil Prices Shake on Iran Escalation and Strait of Hormuz Risk

Iran escalation keeps markets on edge

U.S.-Iran tensions are back in focus for oil traders and investors after President Donald Trump said the ceasefire with Iran was over and AP reported that the United States launched new airstrikes early Thursday.

AP also reported Iranian retaliation across the Gulf, including in Kuwait and Qatar, keeping the market centered on whether the latest fighting stays contained or spreads further.

The immediate risk is not just more violence. It is whether shipping through the Strait of Hormuz remains open enough to avoid a larger supply shock in global crude and natural gas markets.

The narrow waterway carries roughly a fifth of the world’s traded oil and natural gas, making it one of the most important energy chokepoints in the world.

Why Hormuz matters

AP reported that traffic through the strait had improved somewhat after a tentative deal, with at least 576 ships passing in June, compared with more than 3,100 in June 2025.

But WSJ live coverage said vessel traffic fell to 25 transits after the ceasefire breakdown, below a recent average of 30 to 50, underscoring how quickly shipping patterns can change when the conflict intensifies.

The U.S. said its strikes targeted 90 sites in Iran to further degrade Iran’s ability to threaten freedom of navigation in the strait. That leaves the market watching whether the latest military actions reduce the threat or deepen the disruption risk.

Oil prices stay elevated

Oil prices have already moved sharply on the conflict. AP reported Brent crude briefly topped $80 a barrel the day before, then eased to $75.72 on Wednesday after a previous-day jump to $78.02.

AP said U.S. benchmark crude was at $74.06 a barrel on Thursday, still above last week’s $71.80 close. That keeps energy markets sensitive to any further strike, retaliation or shipping disruption.

Fuel consumers are also feeling the strain. AP reported U.S. gasoline averaged $3.80 a gallon on Wednesday, up from $3.79 the day before and down from $4.16 a month earlier.

The Strategic Petroleum Reserve adds another layer of concern. AP reported the reserve stood at 319.5 million barrels as of July 3, the lowest level since 1983.

What traders are watching next

The key question now is whether tanker traffic through Hormuz stabilizes or falls further. Traders are also watching whether Brent and WTI build on their gains and whether Washington or Tehran signals any restraint.

Further strikes or retaliation could lift crude again and feed through to gasoline, diesel, airline fuel and shipping costs. That would also keep inflation expectations and central-bank sensitivity in view.

Energy-linked equities, refiners, transport names and other fuel-sensitive sectors may stay volatile until the market gets clearer evidence that the latest confrontation will not widen into a prolonged supply threat.