Global oil prices surged today after an Iranian attack elicited a vow of reprisal from President Donald Trump, ending a brief calm that had renewed hope among investors of a negotiated resolution.

 A benchmark index for worldwide crude prices climbed nearly 8% this morning, crossing above US$90 a barrel, while at the same time American stocks plunged as major stock indexes plummeted. The Dow Jones Industrial Average closed down 1,153 points, or 2.1%, which amounted to its worst day since April 2025. 

 The S&P 500 dropped 1.5%, while the tech-heavy Nasdaq declined 1.7%. The stock sell-off deepened after the Federal Reserve opted to hold interest rates steady and voiced a forceful commitment to address elevated inflation. 

37% jump since war broke out 

Oil prices account for a large share of the price of auto gasoline. The average price of a gallon of gas currently stands at US$4.09, according to the American Automobile Association (AAA), marking a 37% jump since war broke out in late February.

Trump today reported that America will respond to an overnight missile attack launched by Iran. “We’ll be hitting them [Iran] hard,” Trump told Fox News. The U.S. intercepted an “attempted surprise attack” involving multiple ballistic missiles, which targeted U.S. forces in the Middle East on Tuesday, according to U.S. Central Command.

Oil prices have swung dramatically over recent weeks in response to on-again, off-again fighting. Last month, oil prices briefly fell to their lowest level since before the war on news that a preliminary peace agreement had been reached. 

A resumption of large-scale fighting between the U.S. and Iran, however, cast doubt over the staying power of that deal. Shipping traffic in the Strait of Hormuz declined sharply as the war escalated. 

 The maritime trading route facilitates transport of about one-fifth of global oil supply. In turn, worldwide oil prices soared above US$100 a barrel. Shipping traffic in the Strait of Hormuz declined sharply as the war escalated. 

The maritime trading route facilitates transport of about one-fifth of global oil supply. In turn, worldwide oil prices soared above US$100 a barrel. Another round of price relief arrived on Monday after the U.S. paused attacks on Iran over the weekend, but the resumption of fighting on Tuesday rekindled price gains. 

The Iran war set off a jump in overall inflation due in large part to a rise in oil prices and, in turn, fuel costs.