Oil prices surged past $90 a barrel on Tuesday as hopes for a swift resolution to the U.S.-Iran conflict dimmed, with markets reacting to the collapse of a 60-day ceasefire and rising bond yields signaling heightened financial stress.
The global benchmark Brent crude rose 0.1% to $91 a barrel, its highest level since late July, while U.S. West Texas Intermediate climbed 0.7% to $85. The surge came as the U.S. and Iran’s temporary truce expired without progress, and tensions escalated after President Trump warned of potential strikes on Oman, a U.S. ally, if it intervened in the efforts by Washington in the strait.
Oil Prices Surge on Escalating Geopolitical Tensions
The global benchmark Brent crude rose 0.1% to $91.14 a barrel by 00:03 GMT on Tuesday, according to Reuters, its highest level since July 30. U.S. West Texas Intermediate gained 0.7% to $85.04, the highest since July 31, as markets reacted to the expiration of the June 60-day ceasefire agreement between the U.S. and Iran. The truce, which aimed to de-escalate hostilities and facilitate a broader peace deal, collapsed without progress, with Iran pledging a full-scale offensive
posture, according to Reuters. The U.S. has since ruled out extending the ceasefire.
Oil prices exceed $90 again as hopes fade
Shipping data from Kepler showed only five cargo vessels passing through the strait on Saturday, with no traffic reported on Sunday—a stark contrast to the 31 ships recorded earlier in the week. This decline in maritime activity has further fueled speculation about the potential for extended disruptions to global oil flows.
Bond Yields Hit Multi-Decade Highs Amid Fears of Sustained Conflict
The U.S. Treasury’s 30-year bond yield climbed to 5.33% on Tuesday, according to Reuters, as investors priced in prolonged geopolitical risks. German 10-year government bonds also hit a 15-year high, reflecting global anxiety over the conflict’s economic fallout. Reuters noted that analysts at Deutsche Bank attributed the surge in bond yields to persistent fiscal pressures on governments and the likelihood of continued energy price volatility.
Escalating Rhetoric and Regional Fallout
Oil rises as hopes of ending the war between America fade
The expiration of the U.S.-Iran ceasefire agreement came amid escalating rhetoric from both sides. Iranian officials reportedly signaled a shift toward offensive operations, with a senior Iranian official telling Reuters on Monday that Iran had decided to adopt a full-scale offensive
strategy due to stalled peace negotiations. Meanwhile, U.S. President Donald Trump warned of potential strikes on Oman, a U.S. ally, if it intervened in Washington’s efforts in the strait, according to CNN.
The conflict’s ripple effects are already visible in financial markets. CNN noted that
What Comes Next for Energy Markets?
The immediate focus remains on whether the U.S. and Iran can revive negotiations to stabilize the situation. However, with both sides showing little willingness to compromise, the prospect of a lasting resolution appears distant. Tim Waterer, senior market analyst at KCM, stated that oil prices rose with the start of the week amid increasing tensions in U.S.-Iran relations. The prospect of reaching an agreement to reopen the Strait of Hormuz remains distant, while the number of ships passing through remains very limited,.
For now, oil prices and bond yields are likely to remain under pressure as markets digest the implications of a protracted standoff. The U.S. Treasury’s 30-year bond yield had reached 5.33% by Tuesday, the highest level since about two decades, according to Reuters.
