Oil Jumps to $100 a Barrel, Stocks Sink as Hormuz Crisis Deepens

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Alex Ossola (0:33)

Iran's new supreme leader issues his first official message, but continues to stay out of public view. Plus, the war in the Middle East isn't just disrupting the oil market. It's also driving up prices for things like flights and fertilizer. And hackers hit an American medical devices company called Stryker, saying that they were retaliating on behalf of Iran.

James Rundle (0:54)

The attack on Stryker stands out because it's one of the first visible examples of a successful disruption outside of the immediate region. And that suggests that the conflict's cyber dimension may be starting to spread more globally.

Alex Ossola (1:05)

It's Thursday, March 12th. I'm Alex Ossola for The Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today.

Mostaba Hamani made his first public remarks since succeeding his father to become Iran's supreme leader. In a written statement that appeared in Iranian state media today, Hamani said Iran would open new fronts in the war, promise to attack US bases in the Middle East, and to keep the Strait of Hormuz closed. Hamani hasn't been seen in public since the start of the war, which has fueled speculation about his physical well-being. In the Gulf, the US said it has ramped up its attacks on Iranian mine-laying boats as well as mine facilities. It's trying to preempt efforts by Iran to put mines in the Strait of Hormuz, which could disrupt the global economy. Energy Secretary Chris Wright said the US. Navy will begin military escorts in the Strait of Hormuz later. Here he is speaking on CNBC this morning.

Chris Wright (2:04)

It'll happen relatively soon, but it can't happen now. We're simply not ready. All of our military assets right now are focused on destroying Iran's offensive capabilities.

Alex Ossola (2:15)

Elsewhere in the Middle East, Hezbollah has fired shells towards Syrian military positions, sparking concern of a new war front. Israel's truck Hezbollah targets in Lebanon after the militia launched hundreds of rockets at the country overnight. And Kuwait said drones targeted its airport. Brent crude futures, the global benchmark oil price, settled above $100 a barrel today. Though oil futures surged above $100 in overnight trading on Sunday, today was the first time they closed above that mark in regular trading since August 2022 Hopes of quickly restoring the flow of oil through the Strait of Hormuz are dimming. More tankers were attacked in the waters around Iran, and President Trump said stopping the Iranian regime from getting nuclear weapons was a higher priority than oil prices. Brent futures have soared 65% this year. And stocks fell on worries of a long conflict that will mean a lasting disruption to oil markets. The Dow fell more than 700 points, or 1.6%. The S&P fell 1.5%, and the NASDAQ closed down 1.8%.

We talked on this morning's show about the economic winners and losers of the conflict in the Middle East. And this evening, we're honing in on one industry in particular, agriculture. Prices for fertilizer are surging, sending shares of the companies that make it soaring. And the farmers that need that fertilizer, they have some tough choices ahead for the spring planting season. Joining us now is Patrick Thomas, who covers agriculture for The Journal. Patrick, why is the Middle East important for the fertilizer industry?

Patrick Thomas (3:49)

So the Middle East is actually a massive producer of what's called nitrogen fertilizer. The plants are idled right now, so you're not having the fertilizer produced in plants in the Middle East, and then raw materials that would go into producing it maybe in Europe and elsewhere right now are not getting out as well. The raw materials all come through the Strait of Hormuz and that is being blocked. That cannot get out and that is causing big supply problems.

Alex Ossola (4:14)

How has this been going over on Wall Street?

Patrick Thomas (4:16)

Yeah, investors are really betting that American companies like Mosaic, which is based in Florida, CF Industries in Illinois, Nutrien, which is out of Canada, will be able to expand their profit margins, expand market share at a time of high prices. So you're seeing investors really send these shares of the companies surging in the last couple of days.

Alex Ossola (4:35)

High prices for fertilizer makes me, of course, wonder how the farmers themselves are doing, because this is the crucial spring planting season. Farmers have been in a tough spot for the past few years. There have been lower prices because there were these bumper crops, and then there was, of course, the impact of President Trump's tariffs. Now, as these fertilizer costs are also rising, what are these farmers doing about this?