United States Oil Fund Gains 14% in Two Days as Iran Conflict Sparks Surge
United States Oil Fund jumped roughly 14% over two trading days, marking its sharpest gain since March 2022, after a commander declared the Strait of Hormuz closed on Day 4 of the Iran conflict. Benchmark European natural gas prices doubled within 48 hours, intensifying energy supply concerns.
1. Iran Conflict Disrupts Key Energy Chokepoint
The Iran conflict escalated when a commander of the Revolutionary Guard Corps declared the Strait of Hormuz closed, cutting off roughly 20% of daily global crude oil and significant LNG flows. This chokepoint closure amplified existing geopolitical tensions on Day 4 of the conflict, triggering immediate market alarm.
2. Oil and Gas Prices Surge, Driving USO Rally
Crude oil prices jumped 8% on Monday and added 9% on Tuesday, delivering a two-day 14% advance for United States Oil Fund—the steepest since March 2022. European natural gas benchmarks rose 40% on Monday then 30% on Tuesday, nearly doubling within 48 hours and signaling acute energy supply stress.
3. Market Implications and Future Outlook
Spare production capacity in Saudi Arabia and the UAE may cushion some lost Iranian output, but alternative routes can handle only about one-third of normal volumes through Hormuz. Europe’s storage levels risk falling below 20% by season end, while sustained price gains threaten to prolong global inflation and delay central bank rate cuts.