Stock futures sink while oil spikes as the U.S. Navy looks to squeeze Iran’s economy and break its grip on the Strait of Hormuz

After a week when ceasefire hopes lifted sentiment and stock prices on Wall Street, the U.S. war on Iran could soon flare up again.

Talks between the two countries ended without a deal over the weekend, prompting President Donald Trump to announce that a naval blockade will be imposed on the Strait of Hormuz.

That would target Iranian oil shipments, which have continued flowing, while Tehran has bottled up supplies from other countries by selectively closing the strait with drone and missile attacks.

Futures tied to the Dow Jones industrial average fell 531 points, or 1.10%. S&P 500 futures were down 1.15%, and Nasdaq futures lost 1.32%.

U.S. oil futures jumped 8.63% to $104.90 a barrel, and Brent crude climbed 8.04% to $102.85. Gold fell 2.28% to $4,678 per ounce.

The U.S. dollar was up 0.49% against the euro and rose 0.32% against the yen. The yield on the 10-year Treasury was flat at 4.317%.

After the first month and a half of the war focused on aerial bombardments and missiles barrages, the next phase is poised to rely on naval forces as the U.S. follows a two-part strategy targeting Iran’s main economic lifeline as well as its control of the strait.

U.S. Central Command said the Hormuz blockade will begin on Monday at 10 am ET, and indicated it will also be selective, despite Trump’s vow that the strait should be open to everyone or no one at all.

“The blockade will be enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman,” it explained in a statement. “CENTCOM forces will not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports.”

Preventing Iran from generating oil revenue would not only cripple its already-collapsing economy but also deny financial resources for the Islamic Revolutionary Guard Corps.

Meanwhile, the Navy sent two destroyers through the strait on Saturday to prepare for mine-clearing operations. Central Command said it is “establishing a new passage” for the maritime industry for the free flow of commerce.

The IRGC challenged the warships and warned them to leave. A drone was also reportedly launched at the ships, which destroyed it. On Sunday, the IRGC threatened to deliver a “strong and forceful response” to any warships that approach the Strait of Hormuz.

Until this weekend, U.S. ships had avoided the strait as Navy officials previously have described it as an Iranian “kill box” filled with numerous threats, including anti-ship missiles, drones, fast-attack boats, and mines.

The failure to reopen the strait has sent oil prices skyrocketing, and Tehran’s ability to scare away tanker traffic has emerged as its main source of leverage over the U.S.

But if the Navy can create an alternate path through the strait with manageable risks from Iranian attacks, then the regime loses its most potent weapon.

“One of the things that commercial ships were waiting to see was whether or not this strait was clear, and sailing two destroyers in is a big one,” Campbell University professor Salvatore Mercogliano, who specializes in military and maritime history, said on his podcast.

This story was originally featured on Fortune.com