USO Surges Past $141 as Hormuz Crisis Deepens — Can Geopolitical Fear Alone Sustain a 10% Rally in Five Days?

USO Surges Past $141 as Hormuz Crisis Deepens — Can Geopolitical Fear Alone Sustain a 10% Rally in Five Days?

Shares of the United States Oil Fund ripped higher for the fourth straight session, touching $141.15 in pre-market trading — a 10.8% gain from last week's $127.35 close. The catalyst: U.S. forces targeted two Iranian rocket launchers on Larak Island, while Tehran responded with attacks on the UAE and Jordan , shattering a month of relative calm and sending crude benchmarks surging. WTI rose to $90.82 on September 1, up 5.90% from the previous day , while Brent traded at $94.11 per barrel . For USO holders — whose fund tracks short-dated WTI futures contracts — every dollar of sustained crude strength flows almost directly into the share price.

Two Supertankers Hit in the World's Most Important Shipping Lane This isn't an abstract threat. Bloomberg reported two oil supertankers were hit by projectiles in the Strait of Hormuz on September 1 , and a supertanker caught fire after hitting two naval mines . Roughly 20 million barrels per day — about 25% of global seaborne oil — normally passes through Hormuz . Any sustained closure removes supply that simply cannot be replaced overnight, putting a hard floor under prices.

America's Emergency Oil Stockpile Is Running on Fumes The safety net is thin. The U.S. Strategic Petroleum Reserve held just 289.7 million barrels as of the week ending August 21 — its lowest level since November 1982 . President Trump already authorized a 172-million-barrel release in March, part of a 400-million-barrel coordinated IEA action, the largest in the agency's history . Washington has far less ammunition to cap prices if disruptions worsen.

The EIA Sees No Quick Fix — and the Worst May Not Be Priced In

The U.S. Energy Information Administration has increased its estimates of shut-in Middle East production, and expects ongoing disruptions of about 0.6 million barrels per day to continue through the end of next year . The agency forecasts Brent averaging around $85 in Q3 2026, gradually falling to $69 in 2027 as inventories rebuild — but that baseline assumed less escalation than what unfolded this weekend.

The Risk for USO Holders: History Shows Geopolitical Spikes Can Reverse Fast

Trump has extended military threats to Kharg Island, Iran's key oil export hub , raising the stakes further. Yet crude exports continue to move through Hormuz, with some tankers switching off transponders, and major Gulf producers still managing to ship barrels . If a ceasefire materializes or shipping corridors stabilize, USO's war premium could evaporate as quickly as it appeared. Investors riding this wave should remember: they're betting on escalation, not fundamentals.