Oil shock reshapes markets and EV outlook

Oil prices climbed back into the high $90s per barrel as the conflict in the Middle East widened and shipping through the Strait of Hormuz remained stalled. Brent and WTI futures were hovering just under $100 on Thursday after a brief reprieve the prior day.

The International Energy Agency described the situation as the “largest supply disruption in history,” with multiple tankers attacked on consecutive days and Iran’s new Supreme Leader reinforcing a “Thou Shalt Not Pass” strategy for the vital chokepoint.

A planned 400‑million‑barrel release from strategic reserves has so far failed to cap prices, which continue to rise as traders reassess the duration and severity of the supply shock.

The oil surge weighed on global equities. On Thursday, the S&P 500 (SPX) fell 1.5%, the Dow dropped 1.6%, and the Nasdaq declined 1.8%. A day later, European benchmarks including the FTSE 100 (UKX), STOXX 600, Germany’s DAX (DAX) and France’s CAC 40 (FRA40) were all trading lower.

Wall Street is repeatedly revising oil price targets as it games out possible timelines for a reopening of Hormuz. Macquarie estimates that a closure lasting a few weeks could push crude to $150 a barrel or higher.

Other projections are even more severe. Bloomberg has cited scenarios in which a three‑month closure could send prices to $160, while Iran’s Islamic Revolutionary Guard Corps has said to “expect oil at $200 per barrel.”

Despite Thursday’s market sell‑off and souring sentiment, analysts note that a relatively short war is still largely priced into assets, even as some observers consider the possibility of a longer conflict and more aggressive military responses.

The oil shock is intersecting with existing policy shifts and economic data. The US has eased some sanctions on Russian oil, even as Middle East tensions keep global crude benchmarks elevated.

Separately, the US tapped its strategic petroleum reserve, which is projected to fall to its lowest level since the 1980s after a 40% drawdown, following an even larger release during the early stages of the war in Ukraine.

Goldman Sachs (GS) economists have warned that geopolitical risk weighs on hiring and investment beyond the direct effects of higher oil prices and tighter financial conditions, underscoring the broader spillovers from the conflict.

Rising oil and gasoline prices are renewing attention on electric vehicles. Commentators note that previous oil shocks quickly altered consumer behavior, pushing drivers toward more fuel‑efficient options.

Analyst Doug McIntyre highlighted what he called an irony: after major automakers scaled back EV spending, a sustained jump in oil prices could send US consumers rushing to buy EVs. He pointed to the 1970s oil embargo as a historical parallel for rapid demand shifts.

McIntyre argued that companies that maintained their EV focus, such as Tesla (TSLA), could be among the financial beneficiaries if gasoline remains expensive, saying Tesla (TSLA) “never abandoned its commitment to electric vehicles.”

At the same time, broader stock market turmoil has pushed Big Tech names, including Tesla, Nvidia (NVDA) and Apple (AAPL), close to a 10% pullback from their October highs, reflecting how energy and geopolitical risks are feeding into risk‑asset pricing.

Investors are also tracking incoming US inflation figures, particularly the January Personal Consumption Expenditures index, even as the oil shock risks making some of the data appear dated.

Commentary highlights that the real market shock may be emerging in long‑dated bonds rather than equities, with fixed income once again seen as a key source of insight into how the conflict and higher energy prices are feeding into growth and inflation expectations.