Oil briefly hits $117 as Trump's Strait of Hormuz deadline approaches

Oil prices jumped and stocks tumbled Tuesday, as President Donald Trump's 8 p.m. ET deadline for Iran to reopen the Strait of Hormuz approached without resolution.

The price of U.S. crude oil jumped as high as $117.63 per barrel, but later fell back to trade around $115. International Brent crude oil rose as high as $111.80 per barrel, before trading flat, around $109, by the afternoon.

Stocks, meanwhile, dropped on near constant headlines about the war, although by 1:45 p.m. ET were off their worst levels of the day. The S&P 500 was down 0.4% and the Nasdaq Composite dropped 0.6%. The Dow fell 200 points or 0.3% and the Russell 2000 index, which tracks smaller companies, rose slightly.

U.S. Treasury bonds, which influence consumer interest rates, also fell, sending rates higher. The 10-year yield rose to 4.36%. The average 30-year mortgage rate rose slightly to 6.44%, significantly higher than the 5.99% rate the 30-year hit before the war.

“Oil prices remain the key driver as investors grapple with a broadening supply shock, as well as occasional hopes for de-escalation of the Middle East conflict and an easing of supply chain disruptions,” BlackRock analysts said Monday.

As of Tuesday, the average price per gallon of retail gasoline was $4.14. The average price per gallon of diesel fuel was $5.64, nearing its 2022 all-time high of $5.82.

"We forecast retail gasoline prices to peak at a monthly average of close to $4.30 per gallon (gal) in April," the U.S. Energy Information Administration said in the latest edition of its Short Term Energy Outlook, released Tuesday. The federal agency also projected that diesel prices would "peak at more than $5.80/gal in April."