The U.S. Central Command initiated a naval blockade of the Strait of Hormuz at 10:00 a.m. ET Monday. This action follows the collapse of weekend peace negotiations with Iran. The blockade restricts all vessels entering or departing Iranian ports to eliminate the nation's oil revenue.
Iran condemned the move as piracy and warned that regional ports are no longer safe. The Strait of Hormuz facilitates approximately one-fifth of the world’s global oil supply.
Brent crude surged more than 7% following the announcement. The international benchmark rose to trade above $102 per barrel. U.S. crude prices climbed past $104.
Market analysts expressed concerns over a sustained energy shock and rising inflation. Energy was the only stock sector to post significant gains in many markets. The Vanguard Energy ETF (VDE) rose as the blockade disrupted global energy trade.