Oil prices rose higher on Monday March 2, though not as much as expected, and stocks took that a relief sign and cut early losses toward the end of trading.
The conflict over and around Iran and the Persian Gulf was still raging, with no end in sight. Iran seemed not to be interested in talking about terms, probably because it wasn't clear who would be the leader of the Iranian government.
Israel's Saturday attack on the headquarters of Ayatollah Ali Khamenei, Iran's supreme leader, killed him and other top officials.
Prices of Brent crude, the global benchmark crude, and light sweet crude, the benchmark U.S. crude jumped when futures trading opened. Brent topped out at $82.37 a barrel but closed March 2 at $77.74 per barrel, up 6.7% on the day. Brent is still up nearly 28% on the year.
Light sweet crude finished at $71.23, up 6.3% on the day and up 17% year-to-date.
AAA's daily gas survey put regular gas nationally at $2.997 on Monday, up more than a penny from Sunday and up about 5.6% this year.
The stock market fell like a rock at the open after futures plunged starting late on Sunday March 1. Prices moved steadily higher for much of the session and were actually ahead on the day.
But the gains dissipated after 3:30 p.m.
The Standard & Poor's 500 Index was 3 points to 6,882. The Dow Jones Industrial Average closed down 73 points to 48,905. But the Nasdaq Composite Index was up 81 points to 22,749.
The Strait of Hormuz is the key
The oil price decline and stock recovery were predicated on hopes for a short bout of violence, followed by real talks and maybe a deal.
But all eyes watching the situation were focused on the Strait of Hormuz, the 22-mile wide body of water through which oil and natural gas tankers must pass to get to global markets. Iranian territory is the north side of the strait, and Iranian naval vessels have fired on at least four ships.
Global tracking images show big fleets of ships parked outside the strait in the Persian Gulf and in the Gulf of Oman. Reports suggested insurance companies were refusing to cover losses if tankers tried to pass through.
Qatar had shut down liquid natural gas production on Monday. The Persian Gulf nation is the world's largest liquid natural-gas producer.
Several issues are still search for solutions:
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Who will take control of the Iranian government and be able to negotiate?
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Do the Persian Gulf nations have enough ammunition to fend off Iranian drone and missile attacks?
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Will the conflict last more than a month? The longer the shooting continues, energy supplies will tighten, and prices will rise.
Updated 12:20 p.m. ET
The U.S.-Israel attack on Iran will have immediate effects on all of us. Mostly that will be uncertainty as the news suggests the attacks are going well, and the Trump Administration believes Iran wants to settle things and get the shooting to stop.
Crude oil prices surged 6% to $71 on the open on March 2. At 12:20 p.m., the price had slipped slightly to $70.74, which was still up $3.72. Brent crude was up $4.44 to $77.31 per barrel.
The Dow Jones industrials fell 184 points at the open. The S&P 500 took a 54-point loss, with the tech-heavy Nasdaq-100 Index dropped 360 points.
But at 12:20 p.m. ET, the markets were coping. OK, more than coping.
The Dow was up 9 points at 48,986. The S&P 500 was up 5.5 points to 6,884. The Nasdaq-100 gained 55 points to 25,015, and the Nasdaq Composite had gained nearly 100 points to
The open was about in line with analyst Andy Lipow of Lipow Oil Associates expectations. Lipow told CNBC he thought oil prices would jump at least $3 to $5 a barrel when trading opened.
The oil-price gains may just be the start. One analyst suggested the Brent price might rise to as high $100 per barrel, a level last seen in the summer of 2022.
That would be a gain of nearly 38% on the year, if the prediction of Barclay's analyst Amarpreet Singh holds, The Wall Street Journal reported. Singh's guesstimate (let's give him the benefit of the doubt that he's offering a worst-case scenario) may be an outlier. His base case is for Brent to hold around $80 a barrel.
Watch price signs when you fill up your gas tank
How quickly that will translate into the price of gasoline at your local retailer wasn't clear. But you can expect prices to start to rise perhaps as early as Monday, March 2.
The longer the attacks on Iran continue, you can bet retail prices will move higher. President Donald Trump told the New York Times late Sunday he thought the attacks would end in four-tofive weeks or less.
The longer the attacks on Iran continue, you can bet retail prices will move higher. President Donald Trump told the New York Times late Sunday he thought the attacks would end in four-toThe longer the attacks on Iran continue, you can bet retail prices will move higher. President Donald Trump told the New York Times late Sunday he thought the attacks would end in four-to-five weeks.
What would happen politically inside Iran was totally unclear on Sunday, March 1. The government is in disarray after Supreme Leader Ayatollah Ali Khamenei was killedin an Israeli attack on his headquarters on Saturday, Feb. 28.
Related: What happens to oil prices if bombs and bullets fly in Iran
The predominantly Muslim country with a population of about 92 million has been ruled by fundamentalist Islamists since overthrowing the Shah in 1979.
I should note that oil prices also surged after the first U.S.-Israeli attacks on Iranian nuclear facilities in June. But they fell back quicky, as it became clear Iran's defenses were weak. The oil-price decline sent stocks surging as well.
Three U.S service members were killed on Sundayand another five personnel were injured in related incidents, officials said.
The U.S.-Israeli attacks continued Sunday. So, too, did Iranian missile shots at Israel, nations across the Persian Gulf, and U.S. military bases scattered around the Gulf.
Passengers on cruise ships sailing the Persian Gulf have watched the attacks and explosions, but there have been no reports of cruise ships being hit.
Retail gas prices should shoot higher after Iran attacks
If the violence continues and, worse, results in limits on oil exports from the Persian Gulf, you will see retail gas prices rise and stay high.
Retail gas prices in the United States averaged about $2.984per gallon early Sunday, according to AAA's daily fuel gauge report .
More Oil and Gas:
That's up about 5% so far in 2026. Some of the gain is due to oil refiners starting to make blends for use in the summer.
But a larger portion of the gains have occurred as tensions rose about the Middle East.
Can oil tankers get through the Strait of Hormuz?
The looming question is what may be happening in and around the key Strait of Hormuz. The strait is the outlet through which oil tankers must pass to get from the Persian Gulf into the Gulf of Oman and then into the Indian Ocean and to global markets.
In normal times, about 20% of the world's crude oil passes through the 22-mile wide strait daily.
Related: Every major analyst's S&P 500 price target for 2026
There seemed to be confusion what was happening in the strait. Iran said it wasn't blocking the strait. But there were reports that shots have been fired at at least three tankers. As a result, ships were anchored beyond either entrance to the strait, not willing to take the risk.
"The majority of vessels in the area either performed U-turns, began idling, or diverted toward alternative routes outside the Strait," Dimitris Ampatzidis, senior risk analyst at maritime-intelligence company Kpler, told CNN .
Energy stocks surge as Iranian tensions rise
0f the 22 stocks in the S&P 500 Energy sector, 21 are higher so far in 2026, according to Barchart.com data .
Two of the biggest oil companies, Exxon Mobil ( XOM ) and Chevron ( CVX ), were up 3.5% and 1.5% in the last week. Both have big investments in the Middle East, and Chevron is expanding its presence in Iraq.
For the year, the two stocks are up 26.7% and 22.5%, respectively, ranking 7th and 11th in the sector, respectively.
Among oil-service companies with global operations, leaders are:
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Baker Hughes, up 43.3%
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SLB Ltd, formerly Schlumberger, up 33.8%
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Halliburton, up 27.4%
The Energy Sector is the top performer of the 11 S&P 500 sectors, up 24.4%. It rose 2.2% this past week.
The Iranian tensions clearly have boosted the shares, but many investors have chosen to bet on energy this year as they diversified away from the Magnificent 7 technology stocks.
The tech sector of the S&P 500 is down 5.6% so far this year, second worst among the sectors, just ahead of financial stocks.
Related: Valero targets billion-dollar Venezuela oil windfall
This story was originally published by TheStreet on Mar 2, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.
