Oil Just Pulled a 25% U-Turn

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On February 28, the average price of gasoline in the United States was about $2.98 per gallon.

Ten days later, it is $3.48, about 16% higher.

That might not sound dramatic at first glance.

But across the country, that sudden jump means Americans are now spending roughly $187 million more per day just to fill their gas tanks.

The reason sits thousands of miles away—Strait of Hormuz.

So oil prices exploded.

Crude surged $119 per barrel for the first time in four years.

And just before the market close… the story changed.

President Trump told CBS News the conflict in Iran was “very complete, pretty much.”

And oil prices collapsed.

From $119 overnight, it finished the day near $89.

U.S. benchmark crude fell back to roughly $85 per barrel.

That’s an intraday swing of more than 25%.

Here’s the story

The Mood Flipped.

Equities recovered their losses and turned green.

source: Yahoo


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Why Oil Spikes Make Markets Nervous

When oil moves a little, markets barely notice.

When oil moves a lot, everyone start paying attention.

History shows that when Brent crude rises or falls more than 30% within a month, something unusual is happening beneath the surface of the global economy.

Nearly every time this kind of move occurs, stock market volatility increases sharply.

And in many cases, a recession follows soon after.

source: Sherwood

Oil isn’t just a commodity — it’s a warning signal.

Where It Was Felt Most

source: American Automobile Association (AAA)

Gas stations across the United States are already starting to show the impact.

States Seeing the Biggest Gas Price Spikes

Indiana: ▲ +23%
Ohio: ▲ +22%
Oklahoma: ▲ +21%
Texas: ▲ +20.5%

These states started with relatively cheaper gasoline — often below $3 per gallon — leaving more room for prices to climb.

They’re also deeply connected to the Gulf Coast refinery network, which processes crude priced against global oil benchmarks.

So when Middle East disruptions push crude prices higher, the shock travels quickly through pipelines and refineries straight to local pumps.

Where Prices Have Risen Less

Drivers in the western United States have seen much smaller increases.

Hawaii: ▲ +3%
Washington: ▲ +6%
Oregon: ▲ +7%
Alaska: ▲ +9%
Idaho: ▲ +9%

The reason is structural.

Much of the West Coast operates somewhat outside the Gulf Coast fuel network, meaning shocks tied to Middle Eastern oil tend to arrive more slowly and less directly.

Those states also started with higher gasoline prices, which reduces the percentage change.

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The Early Market Reaction

Some sectors have already started to feel the pressure.

Airlines
Airlines are typically among the most sensitive sectors to rising fuel prices, since jet fuel represents one of their largest operating costs.

But after oil reversed lower during the session, airline stocks managed to recover some ground.

→ JetBlue JBLU ( ▲ 0.67% )
→ United Airlines UAL ( ▲ 2.66% )
→ Alaska Air ALK ( ▲ 2.27% )

Industrial & Manufacturing

→ Eastman Chemical EMN ( ▼ 1.04% )
→ Illinois Tool Works ITW ( ▼ 0.21% )
→ Owens Corning OC ( ▼ 1.57% )

Manufacturers that rely heavily on energy inputs or transportation costs showed modest declines.

Consumer & Retail

→ Macy’s M ( ▼ 1.59% )
→ Kohl’s KSS ( ▼ 2.12% )
→ Best Buy BBY ( ▼ 1.08% )

Meanwhile, retailers tied to middle-class spending weakened slightly as investors anticipated tighter household budgets if gasoline prices continue rising.

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The Story Isn’t Over

For now, oil has retreated from its peak after comments suggesting the conflict could end sooner than expected.

But the oil market is still reacting headline by headline.

One moment it’s pricing a supply shock.

The next moment it’s pricing a diplomatic resolution.

Until the situation becomes clearer, volatility is likely to remain high.

Research from JPMorgan suggests that if the Strait of Hormuz remains blocked, global production cuts could climb toward 4.7 million barrels per day within weeks.

And some strategists believe crude could still reach $150 per barrel if supply disruptions worsen.

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