Global oil prices smashed through the $100 mark in overnight trading as the U.S. vowed to continue its war on Iran, stoking deeper concerns about the fate of crude shipments through the world’s most important transport route.

The Strait of Hormuz, which handles around a fifth of the world’s energy traffic each day, has been at a virtual standstill since the conflict began on Feb. 28, with tankers unable to pass through safely and storage facilities brimming with unsold product. 

That’s added massive upward pressures on global crude prices, with Brent futures contracts, the global benchmark, rising to as high at $119.5 a barrel in overnight trading. That’s a near 80% increase over the past 12 days and the highest in nearly four years. 

With crude traffic blocked, and both the U.S. and Iran vowing to extend their fighting into a second week, global markets are quickly repricing the impact of soaring energy costs on their domestic economies. Traders are paring bets on central bank rate cuts in advance of the expected inflation spike, and preparing for a secondary slowdown in overall growth that could eventually develop into stagflation, a damaging period of little or no GDP growth tainted by quickening inflation and high unemployment, if the war were to continue into the summer months and beyond.

Stock markets are tanking, bond yields are soaring and risk appetite is firmly in retreat.   

Reports suggest leaders of the Group of Seven nations—Canada, France, Germany, Italy, Japan, the U.K., and the U.S.—are considering a coordinated release of crude stockpiles to ease the immediate impact of $100 oil, but with OPEC members around the region slashing production, and the Strait of Hormuz still unpassable, that is only likely to have a temporary impact.

To say nothing of the willingness of some G-7 states, whose trade pacts have been ripped-up and replaced by a universal 15% tariff, to support the political efforts of President Donald Trump over the longer term.
That’s the thing about playing with oil. It gets slippery, dirty, and creates a bit of a mess.

—Martin Baccardax 

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The longer the conflict in Iran lasts, the higher gasoline prices will rise. Several industry experts estimate gas prices ranging from $5 to $5.50 a gallon if the price of Brent crude oil hits $150 a barrel. Crude futures surged 20% Sunday evening, topping $100 a barrel.

• For gasoline, that’s an increase of around 50% from the current national average of $3.36, according to Gas Buddy. While $150 a barrel oil may sound far-fetched that price was even floated by Qatar’s energy minister, Saad El-Kaabi last week.

• Macquarie analysts cite the possibility of $150 oil, given the disruptions, notably the effective closure of the Strait of Hormuz, a critical waterway that transports 20% of the world’s oil. Without a swift resolution, the crude market will break in days, and not in weeks or months, they said.

• One way to game out the potential impact that an extended war could have is by comparing the current situation to the summer of 2022. That’s when gas prices hit a record high after Russia invaded Ukraine and the U.S. sanctioned oil from Russia.

• It took 110 days from Russia’s Feb. 24, 2022, invasion for gas prices to peak at $5.01, and crude didn’t exceed $130 a barrel back then. It takes time for oil prices to influence the retail price of gas, which has to be refined, blended, and transported.

What’s Next: If the Iran war goes on for several months, the price of a gallon of gas could very well top the all-time high set four years ago, says Denton Cinquegrana, chief oil analyst at OPIS. Dow Jones is the parent company of both OPIS and Barron’s.

—Anita Hamilton

Investors will get fresh economic data this week after the unexpectedly large drop in February jobs on Friday. On deck this week are February’s consumer price index, January’s personal consumption expenditures index, more jobs news, and Michigan’s latest consumer sentiment reading.

• Analysts expect February’s CPI to rise 2.5% from the same time a year ago, which would be up from January’s annualized number. The report, due Wednesday, comes after Friday’s report that the economy shed 92,000 jobs in February rather than adding 60,000 as expected.

• This Friday, the government will release the Job Openings and Labor Turnover Survey for January. Economists forecast 6.68 million job openings as of the last business day of January, which would be 130,000 more than in December.

• Consumers are frustrated with the cost of living. An NBC News poll showed 62% disapproval of President Donald Trump’s handling of inflation and the cost of living, versus 36% approval. The University of Michigan is expected to report a 56.8 consumer sentiment reading, slightly higher than February’s.

• On Friday, the market gets the Federal Reserve’s preferred inflation gauge: The personal consumption expenditures price index for January is expected to show a 2.9% annual pace, unchanged from December, while core PCE is expected to rise 0.4% from the prior month.

What’s Next: Fed officials may leave the federal-funds rate target range unchanged at their March 17-18 meeting, but further labor deterioration could lead to rate cuts at the April meeting, LPL Financial chief economist Jeff Roach says. That is Jerome Powell’s last meeting before his term as chair ends in mid-May.

—Megan Leonhardt, Connor Smith, and Janet H. Cho

Oracle reports third-quarter earnings this week. Wall Street expects a healthy sales increase from a year ago, but slowing from the pace set in prior quarters. Analysts will be listening for updates about Oracle and OpenAI pulling back on plans to expand their data center project in Abilene, Texas.

• Oracle and OpenAI have eight data center buildings on 1,100 acres in Abilene. The facility is the first effort in the Stargate Project, an arrangement between OpenAI, Oracle, SoftBank, and the White House that aims to invest billions of dollars in the AI data center buildout.

• Oracle and OpenAI in September raised the possibility of expanding operations in the area. A person familiar with the matter told Barron’s on Friday that is now off the table. Bloomberg reported on Friday that Meta Platforms was considering the additional Abilene space for its own data-center operations.

• The person told Barron’s that the agreement OpenAI and Oracle announced in July to develop up to 4.5 gigawatts of additional Stargate capacity is still on track for sites outside of Abilene. The source said OpenAI’s additional capacity requirements can be handled by other Oracle data centers.

• OpenAI, Oracle, and SoftBank announced in September that they were opening five new data centers across the country, with OpenAI and Oracle building three. The completion of the original eight data-center buildings are still moving forward on schedule, the source said.

What’s Next: Wall Street expects Oracle to report third-quarter earnings of $1.70 a share on sales of $16.92 billion, according to FactSet. In the year-ago quarter, Oracle posted earnings of $1.47 a share on sales of $14.13 billion.

—Angela Palumbo and Janet H. Cho

European nations are standing their ground with the Trump administration, whether that’s Spain refusing to let the U.S. military use its air bases while attacking Iran or its stand on a still-pending trade pact with the U.S. that is now imperiled by President Donald Trump’s latest tariff threats.

• Bernd Lange, the 70-year-old German Social Democrat who chairs the European Parliament’s International Trade Committee, blocked ratification of that trade deal, pointing to the U.S. Supreme Court decision that annulled the tariffs underpinning that agreement. The European Commission wants more clarity about what comes next.

• At issue is the so-called Turnberry Agreement, the location where the terms were hashed out last July. The EU agreed to drop tariffs on all U.S. industrial imports and extend preferential treatment to an array of U.S. agricultural products. Washington fixed its headline tariffs at 15%, but with exemptions.

• The Supreme Court upended things by declaring the tariffs Trump imposed using emergency powers invalid. Trump immediately leaned on a different law to slap a 10% “global tariff” on imports for six months. That looked like a win for Europe, says Ignacio Garcia Bercero, a senior fellow at the Bruegel think tank. 

• But then Trump announced that level would actually be 15%, though he hasn’t formally ordered that. Europeans already resisted Trump’s threat to impose extra tariffs covering countries that sent forces to protect Greenland, which Trump wanted for the U.S. EU leaders cleared a $108 billion tariffs “retaliation list.”

What’s Next: While the U.S. agonizes over inflation and interest rates, Europe has stuck its soft landing, with European Central Bank rates at 2% since last June and room for more cuts. That gives European politicians a bit more courage now, says Michael Field, Morningstar’s European equity strategist.

—Craig Mellow

Mortgage rates a touch below 6% vanished as quickly a