Iran Tensions Trigger Oil Price Spikes

Oil Prices Continue to Surge Amid Escalating Tensions with Iran

As the war with Iran enters its second week, oil prices continue to surge, hitting their highest levels since 2022. The fallout has resulted in elevated stock market volatility, which in turn has pushed down the major indices and impacted the decisions of Wall Street’s institutional buyers and sellers, as well as retail traders.

Opportunity in Uncertainty

But for those looking to hedge against ongoing portfolio losses, the recent spike in commodity prices affords astute investors an opportunity to use the situation in the Middle East to their advantage in the short term.

Oil Prices Return to Pandemic Levels

Last week’s escalations in military operations have led Iran to effectively close the Strait of Hormuz, the roughly 90-mile-long, narrow maritime choke point connecting the Persian Gulf with the Gulf of Oman that is critical to global oil trade.

According to the U.S. Energy Information Agency, approximately 20 million barrels of oil — the equivalent of about 20% of total global petroleum consumption — is shipped through the strait daily.

The price of Brent crude, the global oil benchmark, now sits at $105 per barrel, while the U.S. benchmark, West Texas Intermediate, hovers around $103 per barrel. Both of those figures are the highest since July 2022.

That supply pinch is already translating to higher prices at the pump. According to both GasBuddy and AAA, the average price per gallon of gasoline in the United States is currently $3.47, up from $2.90 per gallon just one month ago.

Surging Oil Prices Are an Investment Opportunity

The stocks of most Big Oil companies remain safe bets going forward, as they were already among the top performers in 2026 and are benefiting from a natural market cycle. Before the war began, energy’s S&P 500-leading gains were the result of a rotation out of speculative and high-flying AI and software stocks.

Investors can also gain broad exposure to energy through sector exchange-traded funds (ETFs) — diversified baskets of stocks bundled together often thematically — such as the Energy Select Sector SPDR Fund, or XLE.

As the world’s largest energy ETF, the XLE has more than $39 billion in assets under management, a low expense ratio of 0.08% and a dividend that currently yields 2.56%, or $1.46 per share annually. The fund has gained nearly 25% in 2026.

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