The United States Oil Fund LP (USO) surged 7.38% in pre-market trading on Monday, mirroring a sharp rally in global crude oil benchmarks. The move followed the reopening of energy markets after a weekend of escalating military conflict between the United States, Israel, and Iran, which has raised significant concerns over potential disruptions to Middle Eastern oil supplies.
U.S. and Israeli forces launched major strikes against Iran, prompting retaliatory attacks and creating heightened uncertainty in a key oil-producing region. A primary market focus is the Strait of Hormuz, a critical maritime chokepoint through which approximately 20% of the world's seaborne oil transits. Reports indicate that Iran's Revolutionary Guard Corps has warned vessels against passage, leading to a dramatic drop in tanker traffic and stoking fears of a prolonged supply blockage.
Analysts from multiple institutions warned that oil prices could test $100 per barrel if the strait remains effectively closed. The immediate market reaction saw Brent crude futures jump over 8% and West Texas Intermediate rise sharply as trading resumed. While the OPEC+ alliance announced a modest production increase in response to the crisis, analysts noted that such measures would provide limited relief if physical shipments from the Gulf are constrained, leaving the market highly sensitive to geopolitical developments.
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