Iran banned US weaponry from transiting the Strait of Hormuz on May 14, 2026. The Iranian military now supervises all traffic through the strategic waterway. This escalation restricts a chokepoint that previously facilitated 20% of global oil supplies.
Regional tensions increased after Iran's Foreign Minister accused Kuwait of attacking an Iranian vessel and detaining its crew. Despite these supply risks, WTI crude fell $1.16 to close at $101.02 per barrel.
Market participants are weighing geopolitical risks against growing fears of demand destruction. Boston Federal Reserve President Susan Collins signaled that further interest rate hikes may be necessary to curb inflation. These hawkish comments suggest a potential economic slowdown that would reduce global fuel demand.