US Stocks Decline as Iran Closes Strait of Hormuz and Oil Prices Rise

US stocks closed lower on Monday as escalating tensions between the United States and Iran drove up oil prices and dampened investor sentiment. The S&P 500 slipped 0.1% to 7,119.

Iran closed the Strait of Hormuz once again, citing a US blockade and seizure of an Iranian cargo ship as violations of a two-week ceasefire. The waterway, through which about one-fifth of the world's oil and liquefied natural gas flows, had been briefly reopened on Friday.

US benchmark crude rose $5.18, or 6.3%, to $87.88 a barrel. Brent crude gained 5.3% to $95.20 a barrel. The price rebound followed a drop on Friday after Iran's initial announcement to allow ships to pass. Iran stated it would not participate in a fresh round of negotiations while the blockade remains in place.

European markets closed in negative territory, with Frankfurt down 1.0%, Paris off 0.8%, and London lower by 0.5%. Asian markets, including Tokyo, Hong Kong, and Shanghai, saw gains earlier in the day. Uncertainty persists over negotiations in Islamabad.

Only one round of talks occurred on April 11, ending without conclusion, though preparations for further discussions have continued. Alternative fuels are gaining traction with biodegradable methods of production and consumption. Companies like Daqo New Energy, which manufactures polysilicon for solar power solutions, and Canadian Solar, an integrated provider of solar power products, are drawing investor interest.

Brookfield Infrastructure Partners, engaged in energy and other infrastructure, reported revenues of $11.53 billion in 2021. Renewable Energy operates 14 biorefineries in the US and Europe, generating $3.2 billion in revenue in 2021. Covanta Holding Corp focuses on waste-to-energy and renewable energy production businesses, primarily in the United States.

Iranian ports remains a key sticking point in negotiations, with both sides blaming each other for ceasefire breaches. Investors worry about prospects for a speedy end to the conflict. Alternative fuel stocks are seen as a way to reduce the global carbon footprint, with sources including ethanol from crops, electricity from solar and wind, and biodiesel from vegetable oils and animal fats.