According to a statement by Iranian Republican Guard Corps advisor Ebrahim Jabbari on Monday, the Strait of Hormuz “has been closed” and that Iran will “attack and set ablaze any ship attempting to cross.”

The strait carries roughly 20% of global oil supply and a fifth of LNG trade.

“We have not seen anything like this in pretty much the history of the Strait of Hormuz,” Rystad Energy chief economist Claudio Galimberti said, comparing it to “blocking the aorta in a circulatory system.”

Traders on Polymarket now place 80% odds that Iran will close the strait by the end of the year, with over $8.9 million in total volume traded on the contract.

What It Means For Energy Stocks

Exxon is trading around $151, Chevron around $188.

Bank of America raised price targets on both majors Monday, citing “the increased oil risk premium baked into stock prices” and warning of $10-$20 per barrel near-term crude impact if disruptions persist.

Every $1 oil increase adds roughly $0.25 to Exxon’s EPS. With Brent up more than $10 from pre-conflict levels, the earnings tailwind is significant.

Gasoline Prices In The U.S. Could Force Trump’s Hand

U.S. gas prices have already climbed to $3 per gallon, the highest in three months, just a week after Trump touted cheap energy in his State of the Union.

GasBuddy analyst Patrick De Haan estimates pump prices could rise another 10-30 cents in coming days.

That’s a problem for the White House. Secretary of State Marco Rubio said Monday the administration “already anticipated a surge in oil prices” and has a plan to “alleviate the impact.”

Treasury Secretary Scott Bessent is set to roll out details Tuesday.

“President Trump has expressed a strong desire for oil prices to remain as low as possible,” Krimmel Strategy Group founder Jeff Krimmel said in January.

If pump prices keep rising, Trump may cut the Iranian campaign short, which could cap upside for energy stocks.

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