Oil prices surged past $110 a barrel on Monday as the U.S.-Israeli war on Iran entered its second week, sending global stock markets into a tailspin and raising urgent questions about what comes next for American entrepreneurs and small-business owners who are already feeling the squeeze at the pump.
West Texas Intermediate crude spiked as high as $119.48 per barrel before settling back to around $113.30, a 24.6% jump. Brent crude, the international benchmark, gained 23.4% to $114.38. It is the first time oil has topped $100 a barrel since Russia’s 2022 invasion of Ukraine.
Global Markets in Freefall as Strait of Hormuz Remains Closed
The Strait of Hormuz, through which roughly 20% of the world’s oil supply passes daily, remains effectively closed. Gulf state producers have begun cutting output as onshore storage fills up, and Iraq’s oil production has collapsed by 60%, according to Fortune.
Futures tied to the Dow Jones Industrial Average fell 1,011 points, or 2.13%, overnight. S&P 500 futures dropped 2.01%, and Nasdaq futures lost 2.31%. In Asia, South Korea’s KOSPI index triggered a circuit breaker after plunging nearly 8%, while Japan’s Nikkei 225 sank more than 5%.
Gas Prices Jump 14% in a Single Week
The national average for a gallon of regular gasoline hit $3.45 on Sunday, up roughly 47 cents from a week earlier, according to AAA. The jump marks a 14% increase in seven days, and analysts warn that $4 gas is now a realistic near-term possibility.
For founders running logistics-heavy or delivery-dependent operations, the spike translates directly into higher costs. The International Monetary Fund has estimated that every sustained 10% rise in oil prices adds 0.4 percentage points to inflation and shaves 0.15 percentage points off global economic growth.
G7 Weighs Emergency Oil Reserve Release
In a sign of just how seriously world leaders are taking the crisis, G7 finance ministers scheduled an emergency teleconference for Monday morning to discuss a coordinated release of up to 400 million barrels from strategic petroleum reserves. Bloomberg reported that three G7 nations, including the United States, have already expressed support for the proposal. The proposed release would represent roughly 25% to 30% of the reserves available to the 32 International Energy Agency member countries.
Oil prices briefly pulled back from their highs after the Financial Times first reported the G7 discussions, though analysts caution that a reserve release alone may not be enough to offset a prolonged disruption to Middle Eastern supply.
What This Means for U.S. Entrepreneurs
The combined effect of surging energy costs and broader economic uncertainty is creating a challenging environment for business owners across the country. Rising fuel and shipping costs could compress margins for startups and small businesses already navigating a tight economy. Economists warn that the situation risks triggering a combination of higher prices and slower growth, a scenario that could dampen consumer spending, the primary engine of the U.S. economy.
For entrepreneurs looking to keep their businesses resilient through periods of disruption, the coming weeks will be critical. The conflict shows no signs of de-escalation, and markets are now pricing in a prolonged war. How quickly the G7 reserve release materializes, and whether diplomatic channels can produce a ceasefire, will likely determine whether the current shock remains a short-term spike or becomes a sustained drag on the economy.
