Iran Sends Negotiators Even as It Closes Strait of Hormuz

Iran closed the Strait of Hormuz to commercial shipping Friday, accusing the United Arab Emirates of violating a ceasefire. The government sent a delegation to Switzerland for talks with European mediators the same day.

The strait handles roughly a fifth of global seaborne oil. Tanker rates rose as insurers adjusted premiums. Crude oil futures climbed. The Energy Select Sector SPDR Fund (XLE) gained, with ExxonMobil and Chevron among the leaders.

The two moves pulled in opposite directions. A prolonged closure would disrupt supply. A diplomatic resolution would restore it. The split left traders gauging which outcome the market was pricing.

The broader equity market fell, with consumer and transportation stocks under pressure on fuel cost concerns. Airlines dropped. The dollar strengthened against currencies of oil-importing nations such as Japan and India.

Negotiations in Geneva are scheduled to begin Monday. The Iranian foreign minister said the delegation would discuss maritime security guarantees.