Brent crude oil jumped 8.3 percent to $95.40 per barrel on September 1 after the United States conducted airstrikes on Iranian naval installations near the Strait of Hormuz, disrupting shipping through the waterway that carries approximately 21 million barrels of oil daily. The attack, which targeted three Iranian fast-attack craft and a coastal radar station, marked the first direct US military action against Iranian assets since January 2024. US Central Command confirmed the strikes were conducted in response to what it described as "repeated provocations" against commercial vessels in the Gulf of Oman. "The United States will not tolerate interference with freedom of navigation in international waters," said Secretary of Defense Lloyd Austin in a statement released by the Pentagon. ## Markets React With Volatility The S&P 500 fell 2.1 percent at the open before recovering to close down 0.8 percent at 5,847 points. The Dow Jones Industrial Average dropped 340 points intraday before settling with a 128-point loss. The NASDAQ Composite, heavy with technology stocks less sensitive to energy costs, recovered to close up 0.2 percent. Gold rose 3.4 percent to $2,680 per troy ounce, its highest level since March 2025. The CBOE Volatility Index, known as the fear gauge, spiked to 28.7 from 16.2 the previous Friday. "Markets are pricing in a 40 percent probability of a sustained disruption lasting more than two weeks," said Katherine Mann, chief markets economist at Barclays. "If the Strait reopens fully within seven days, we expect oil to retreat to the mid-$80s." ## Shipping Disruptions Ripple Through Supply Chains Tanker rates for Very Large Crude Carriers on the Persian Gulf to Asia route surged 340 percent within hours of the attack, according to the Baltic Exchange. Insurance premiums for vessels transiting the Strait of Hormuz increased to 2.5 percent of hull value, up from 0.3 percent the previous week. At least 14 oil tankers diverted course away from the Strait, choosing longer routes around the Cape of Good Hope or through the Suez Canal, according to marine tracking data from Kpler. The diversions add an estimated 10 to 14 days to delivery timelines for Asian refineries. "Refiners in Japan, South Korea, and India are drawing down strategic reserves," said Toril Bosoni, head of the International Energy Agency oil industry division. "We are monitoring the situation closely and stand ready to coordinate a collective response if supply disruptions persist." ## Geopolitical Escalation Fears Iranian state media reported that the strikes killed four Iranian naval personnel and damaged two patrol vessels. The Iranian Foreign Ministry summoned the Swiss ambassador, who represents US interests in Tehran, and warned of "a proportional response at a time and place of Iran choosing." The escalation raised questions about the future of diplomatic engagement between Washington and Tehran. Nuclear talks scheduled for September 15 in Vienna were postponed indefinitely, according to a State Department spokesperson. Energy analysts at Goldman Sachs raised their 12-month Brent crude forecast to $105 per barrel, citing a risk premium of $15 to $20 per barrel for geopolitical supply disruption. JPMorgan Chase estimated that a sustained two-week closure of the Strait could remove 6 million barrels per day from global supply, equivalent to roughly 6 percent of world demand.