Stocks Fall And Oil Surges As Tensions Flare Up In The Strait Of Hormuz
Stocks fell and oil jumped on Monday as tensions flare up again around the Strait of Hormuz.
Concretely, the S&P 500 dropped 0.41% and the Nasdaq Composite did so by 0.22%. In contrast, Brent crude, the international benchmark, climbed 5.45% and topped $114 a barrel, while West Texas Intermediate, the U.S. benchmark, jumped 3.31% and clocked in at $105.31 a barrel.
Tensions rose again on Monday after the commander of the U.S. Central Command (CENTCOM) Brad Cooper, said U.S. forces sunk six Iranian small boats that were targeting civilian vessels in the Strait of Hormuz.
Cooper said in a press conference that “each and every one” of the threats were neutralized, adding that U.S. forces have now been able to clear a path in the Strait of Hormuz for commercial vessels to cross the key waterway.
He went on to say that the U.S. military has set up a “defensive umbrella” to allow for ships to cross.
Cooper also declined to say if the recent actions meant the ceasefire had collapsed, but claimed Tehran “initiated aggressive behavior.” “What we saw this morning was Iran initiating aggressive behaviors. We are simply going to respond to that,” Cooper said. Tehran disputed the claim, with a senior official telling local media that it is “false.”
The U.S. had already said it was ready to “guide” commercial ships and break Iran’s blockade. The Maritime Information Center, led by the U.S., had advised ships to cross through Omani waters, saying it had set up an “enhanced security area.”
The development comes after the UAE said it intercepted Iranian missiles launched at its territory, the first such event since the April 8 ceasefire.
The UAE condemned the attacks later on Monday, calling them a “renewed treacherous Iranian aggression” that targeted civilian sites and left three people injured as a result.
“These attacks represent a dangerous escalation and an unacceptable violation,” the country’s foreign minister said in a social media publication, noting that the country reserves the right to respond in a manner it deems appropriate.
President Donald Trump also threatened Iran on Monday, saying Tehran will be “blown off the face of the Earth” if its forces seek to prevent ships from crossing the Strait of Hormuz..
He went on to say that the U.S. military buildup in the region continues to grow. “We have more weapons and ammunition at a much higher grade than we had before.”
“We have the best equipment. We have stuff all over the world. We have these bases all over the world. They’re all stocked up with equipment. We can use all of that stuff, and we will, if we need it.”
