Meanwhile, others warn that high oil prices are contributing to a K-shaped economy: File Image/Pixabay

Oil traders on Tuesday reverted back to worry mode and caused  a 2 percent increase in prices, as NATO allies told U.S. president Donald Trump they did not want to participate in the war with Iran – and the goal of creating a coalition to escort tankers through the Strait of Hormuz seemed suddenly remote.

Brent settled up $3.21, or 3.2 percent, at $103.42 per barrel, and West Texas Intermediate settled up $2.71, or 2.9 percent, at $96.21 per barrel.

Warren Patterson, head of commodities strategy at ING, noted that “While the U.S. administration has touted the idea of insurance guarantees and naval escorts, neither has materialized yet.”

Meanwhile, analysts such as Nicholas Bloom, an economics professor at Stanford University, worried that the war and the spike in oil prices were exacerbating a so-called K-shaped economy in which higher-income households do better (thus forming the upward arm) while lower-income households fall further behind (and form the downward arm).

He said, “That, I think, is a major concern as an economist: inequality.”

While concern that prolonged high gas prices would sap household budgets and cause companies to pass higher transportation costs onto consumers, the sole bearer of encouraging news about demand seemed to be Delta Air Lines, which raised its forecast for revenue for the first three months of 2026 on the grounds it has seen demand to fly accelerate into March both private and business-wise - and that this was enough to offset higher jet fuel prices.

Similarly, American Airlines reported stronger revenue growth for the start of 2026 than it had previously forecast.

As for the ongoing blockage of the Hormuz, Stephen Innes, managing partner at SPI Asset Management, told media that, "From a market perspective, it starts to look less like a full blockade and more like selective disruption."

Innes was referring to Iranian foreign minister Abbas Araghchi earlier stating that the Hormuz remains open, which for Innes suggested that Iran may be allowing most traffic to pass through the strait while restricting only certain vessels.

Further, if cargoes for major buyers such as India and China are moving (as previous reports verified), Innes said Saudi Arabia can redirect additional volumes through its East-West pipeline to the Red Sea, and “What initially looked like a catastrophic blockade begins to resemble a constrained detour rather than a full seizure of the artery.”