Oil Prices Crash From $120 High as Iran War Signals Shift: Brent Crude, Dow Jones, and Stock Market Live Today
The crude oil market is undergoing one of the most violent two-day swings in modern history. Brent crude is trading near $91 a barrel Tuesday after briefly touching $119.50 — a level not seen since the early days of the Russia-Ukraine war — as the U.S.-Iran conflict reshapes global energy flows and leaves Wall Street scrambling for footing.
From $60 to Nearly $120 in Days
U.S. oil prices began the year below $60 a barrel. The war with Iran sent prices surging for two primary reasons: a near-shutdown of the Strait of Hormuz and a slowdown in oil production across the Middle East. The Strait carries roughly 20% of the world's daily oil supply, and Iran's threats against transiting tankers have brought traffic to a near halt.
Gulf Arab states are cutting production because they are running out of storage space, as crude piles up with nowhere to go. The estimated 20% supply disruption is roughly twice as large as the record set during the Suez Crisis of 1956–1957, according to historical data from Rapidan Energy Group.
The ongoing disruption has quickly become one of the most costly in history, disrupting the export of over 20 million barrels per day from the region.
Tuesday's Whipsaw
Oil prices, which spiked to nearly $120 a barrel Monday at the height of fear around the Iran conflict, dropped sharply Tuesday as traders believed a group of countries would tap emergency crude reserves to mitigate disruption caused by the conflict.
A deleted social media post by Energy Secretary Chris Wright added another jolt. US crude trimmed a plunge that briefly drove it below $80 after the White House said the U.S. hadn't escorted a tanker through the Strait of Hormuz — a claim Wright's office had appeared to post on social media before deleting it.
As of mid-afternoon ET, Brent was trading at $91.49 and WTI at $87.76 per barrel.
Stocks: Volatile but Holding
The S&P 500 fell slightly on Tuesday in choppy trading as oil prices pulled back and traders kept an eye on the Iran war. The broad market index dropped 0.2%. The Dow Jones Industrial Average dipped 38 points, or 0.1%. The Nasdaq Composite also slipped 0.1%.
Monday had been a different story. The S&P 500 rose 0.83% to close at 6,795.99, while the Dow Jones Industrial Average added 239.25 points, or 0.5%, and ended at 47,740.80 — an impressive turnaround after the Dow had been down nearly 900 points at its session low.
The Dow has fallen more than 1,000 points since February 27 — the last trading day before joint U.S.-Israeli airstrikes targeting Iran began.
Pump Prices and the Inflation Risk
Consumers are feeling it at the pump. The average price per gallon of unleaded gas in the U.S. climbed to about $3.54 on Tuesday, the highest level since mid-2024 and a 21% increase from a month ago.
PFCU chief economist Tom Porcelli wrote that sustained oil prices north of $130 per barrel would materially raise the risk of recession, though the U.S. economy, as a net energy exporter, can better weather higher prices than many other countries.
What the Forecasters Say
The U.S. Energy Information Administration forecasts Brent will remain above $95 per barrel over the next two months, before falling below $80 in the third quarter of 2026 and around $70 by year-end — with the outlook highly dependent on the duration of the conflict and resulting production outages.
Homayoun Falakshahi, lead crude research analyst at Kpler, said: "I would say that the move is a bit overdone in the very short term, but if between now and the end of March you don't have an amelioration of traffic around the strait, we could go to $150 a barrel."
Futures contracts for delivery in 2027 and 2028 are trading in the high $60s — a signal that traders view the current spike as temporary, not structural.
Saudi Aramco's Signal
Saudi Aramco CEO Amin Nasser addressed the company's earnings call Tuesday, confirming all areas are safe and operating normally, with Ras Tanura starting back up following a precautionary shutdown after a drone interception. The speed at which Gulf producers could ramp shipments back up — once Hormuz clears — remains the single most-watched variable in the market.
Bahrain and Qatar have declared force majeure, and recent drone and missile strikes on critical energy infrastructure have compounded the disruption across the region.
