Energy holds a 42% year-to-date lead as Hormuz strikes push Brent back toward $97

by Bisi Oyelaran · September 8, 2026

Equities Reporter, US Market Current

The widest performance gap in the US equity market this year is not between growth and value or large caps and small caps. It is between energy and everything else, and the events of the past four days have pushed the commodity underneath that gap sharply higher.

As of 2:34 p.m. Eastern on Aug. 31, according to a sector performance breakdown published by Investing.com, the Energy Select Sector fund tracking the S&P 500 energy group was up 42.32 percent for 2026. The next best performers were materials at 15.86 percent and industrials at 12.62 percent. At the other end, communication services was down 5.60 percent, consumer discretionary down 3.02 percent and utilities down 1.42 percent. Energy's lead over the second-place sector was roughly 26 percentage points with a third of the year still to run.

That gap is a commodity story rather than an earnings story. The same analysis noted that energy sector earnings growth is negative year-over-year, and attributed the rally to multiple expansion and commodity dynamics rather than improving profitability. It also flagged the sector's negative beta to the broader index — a statistical relationship, not a forecast, but one that helps explain why energy has climbed on days when the rest of the market has not.

The commodity itself has been anything but calm. Al Jazeera reported on Sept. 7 that Brent crude rose to hover around $97 a barrel, up 9 percent over the previous five days and 19 percent over the previous month, with Monday's move approaching the highest point since July 24, when the outlet said prices topped $97.93. West Texas Intermediate was quoted at $92.27 a barrel, up 79 cents and also at a near six-week high. Those are futures prices reported during Monday's session; US equity markets were closed that day for Labor Day, so they are not tied to a US stock market close.

The proximate trigger was military. Al Jazeera reported that the United States hit three Iranian oil tankers on Saturday, and that Iran's Islamic Revolutionary Guard Corps said it had struck three tankers and three US-linked vessels. The report also said Saudi Aramco's Jizan facilities were struck for the second time. Citing data from the analytics platform Kpler, it put an average of 10 commodity ships crossing the chokepoint each day over the previous 10 days.

The scale of the disruption is easier to grasp from the Energy Information Administration's own accounting. In its August Short-Term Energy Outlook, the EIA reported that "Crude oil and petroleum liquids transported through the Strait of Hormuz averaged 4.9 million barrels per day (b/d) in the second quarter of 2026 (2Q26), down from an average of 21.6 million b/d in 4Q25." That is roughly a 77 percent reduction in throughput at what has historically been the single most important passage in the seaborne crude trade.

The inventory consequence is already visible in the agency's estimates. The EIA said global oil inventories "fell by an average of 4.2 million b/d in 2Q26" and projected a further decline of "3.8 million b/d on average in 3Q26." It also assessed that production shut-ins averaged 5.5 million b/d in July.

The August outlook, completed on Aug. 6 and released Aug. 11, forecast that "the Brent crude oil spot price will average around $85/b in 3Q26," decreasing "to an average of $78/b by 4Q26" and to "an average of $69/b in 2027." Brent's move toward $97 on Monday sits well above that third-quarter path, which is the sort of gap that tends to get revised. The next Short-Term Energy Outlook is scheduled for Wednesday, Sept. 9, normally released between noon and 12:15 p.m. Eastern, according to the EIA's published release schedule.

The transmission from crude into consumer prices is not hypothetical. The Bureau of Labor Statistics reported in its July CPI release, published Aug. 12, that the energy index rose 14.7 percent over the preceding 12 months even as it declined 1.5 percent on the month. That single line item is the main reason the all items index was up 3.4 percent over 12 months while the index for all items less food and energy was up only 2.5 percent.

Refined products may be the sharper edge. Patrick De Haan, head of petroleum analysis at GasBuddy, told Al Jazeera that "US diesel prices have never been this high, and now the countdown starts." Diesel sits upstream of freight, agriculture and construction costs in a way gasoline does not.

The commentary in the same report ran in more than one direction. Arif Gasilov, a partner at the Gasilov Group, told the outlet that "Crude went back down to what the pre-war level was in early July," a reminder that this year's crude tape has round-tripped more than once. Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, pointed instead to the conflict itself, saying "This is a reflection of continued conflict and exchange of fire."

For equity investors, the awkward part of energy's leadership is what produces it. A sector rising because a chokepoint is closed is priced off a geopolitical variable no analyst model handles well, and the EIA's own forecast assumes that variable eventually normalizes — the agency's $69 per barrel 2027 average implies a substantially lower price deck than the current tape supports.

The Federal Reserve has already written the connection into its record. Minutes of the July 28-29 FOMC meeting state that inflation "remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy." That makes the crude tape a policy input as well as a sector input.

Two dates will test the linkage this week. The September Short-Term Energy Outlook lands Wednesday with the agency's first formal price revision since the weekend strikes, and the August Consumer Price Index arrives Friday at 8:30 a.m. Eastern, per the BLS release schedule — the last major inflation reading before the Sept. 15-16 FOMC meeting.