Oil Shock Splits Markets, As Economy Teeters Toward Stagflation: This Week On Wall Street

by | Mar 13, 2026 | General

Two weeks into the Iran war, hopes for a quick resolution to the Hormuz oil shipping crisis are fading fast.

The critical chokepoint — through which 20% of the world’s daily oil supply normally flows — remains closed, with Iranian forces threatening to strike any unauthorized vessel attempting to pass.

In terms of total production loss, this is the worst oil crisis in modern history, surpassing the 1970s Arab embargo and the Gulf War disruptions of the early 1990s.

The approximately 20 million barrels per day affected has prompted an unprecedented coordinated response: the IEA announced the release of 400 million barrels from member-country reserves, while the Trump administration ordered an additional drawdown of 172 million barrels from the Strategic Petroleum Reserve — bringing the SPR to its lowest level since the 1980s.

Despite these extraordinary measures, oil prices climbed for a second consecutive week. WTI crude approached $95 per barrel by Friday morning after Iran’s new supreme leader Mojtaba Khamenei, declared the strait must remain closed.

If oil stays above $90–100 per barrel, economists warn the U.S. could slip into stagflation: rising inflation and slowing growth. It’s also a worst-case scenario for central banks. Inflation would normally call for higher interest rates, but a weakening economy demands the opposite.

On Wall Street, the energy shock has not triggered a broad-based collapse. Major indices have declined, but the selloff has remained relatively contained given the scale of the disruption.

As Crisis Reshapes Markets, Beneficiaries And Laggards Emerge

Oil refiners —such as Marathon Petroleum Corp. (NYSE:MPC), Valero Energy Corp. (NYSE:VLO) and HF Sinclair Corp. (NYSE:DINO) — have been among the best performers since the war began.

In a similar fashion, fertilizer and chemical producers — such as CF Industries Inc. (NYSE:CF), The Mosaic Company (NYSE:MOS) and Dow Inc. (NYSE:DOW) —  witnessed a sharp rally. The Hormuz Strait is also a critical corridor for global urea and phosphate shipments.

On the losing side, sectors exposed to rising fuel costs have taken significant hits: shipping, transportation, airlines, and cruise lines have all seen sharp declines.

Michigan automakers have also suffered as higher energy costs threaten production expenses and consumer demand.

Ford Motor Co (NYSE:F) shares, for example, are down 15%. And General Motors (NYSE:GM) is off 8% since the start of the conflict.

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