[Edaily Reporter Bang Sung Hoon ] Hopes that the Strait of Hormuz would reopen were dashed in just half a day as the United States and Iran clashed over mutual demands for compensation. International oil prices surged again, and the New York stock market fell for the second consecutive day.

According to Reuters and other sources on the 11th (local time), Mohsen Rezaei, Secretary-General of Iran’s Supreme National Security Council, made it clear that day that Iran would not open the Strait until the U.S. changed its stance and accepted Iran’s conditions. He also stated that the agreement with Oman and the opening of the Strait were separate issues. Appointed on the 9th, he is a hardliner who served as Commander-in-Chief of the Islamic Revolutionary Guard Corps for 16 years.

Just a few hours earlier, the mood had been different. Pakistani Defense Minister Kawaaja Asif stated in Islamabad that day that, judging by the signals of the past few days, a kind of agreement was in the works, and the Qatari Foreign Ministry also reported that negotiations between Oman and Iran on strait management had made significant progress. The two countries are key mediators in this conflict.

Iran has put forward six conditions: the withdrawal of U.S. troops; a halt to attacks on Iran and its allies; the lifting of the naval blockade; the lifting of sanctions; full compensation for war damages; and the release of frozen assets. U.S. President Donald Trump, however, stated on the 10th that Iran must compensate for damages incurred over the past 50 years and ordered that this be reflected in all negotiations.

The markets reacted immediately. On the 11th, the Dow Jones Industrial Average closed at 53,791.85, down 0.34% from the previous trading day, while the S&P 500 index closed at 7,728.20, down 0.32%. The Nasdaq Composite Index fell 0.60% to 26,445.45. The S&P 500 has been on a downward trend for the second consecutive day after hitting an all-time high on the 7th.

Oil prices were the main factor dragging down the indices. West Texas Intermediate (WTI) crude closed in the $83 per barrel range, up 1.6%, while Brent crude briefly hit $90 during the session before retreating to around $89. The energy sector was the only one of the S&P 500’s 11 sectors to rise by more than 1% (1.1%), while the communication services sector fell by more than 2%. Alphabet fell 3.8%, and Amazon and Apple also traded lower.

Clashes continued on the ground. Early this morning, the U.S. military fired two Hellfire missiles from a helicopter at the Panamanian-flagged cargo ship Bella Nova, which was attempting to break through the blockade and head toward an Iranian port, disabling its steering system. In the Bab el-Mandeb Strait near Yemen, a cargo ship was struck in an attack believed to have been carried out by Houthi rebels, killing six people, including crew members and rescue workers.

The burden of rising prices has also intensified. The Strait of Hormuz is a chokepoint through which approximately one-fifth of the world’s crude oil and liquefied natural gas (LNG) shipments passed before the war. As oil prices rose, the average price of gasoline in the U.S. surpassed $4 per gallon. Market attention turned to the Consumer Price Index (CPI) for July, set to be released on the 12th. The market expects a year-over-year increase of 3.4%, a slight slowdown from June’s rate of 3.5%.

Elias Hadad, a strategist at Brown Brothers Harriman, noted, “Oil prices are driving the war narrative, and oil price volatility will determine the pace of escalation and de-escalation.” José Torres, an economist at Interactive Brokers, said, “Since investors have been waiting for a consensus for several weeks, tangible progress will be needed for interest rates to fall significantly and for the stock market to rally further.”