Oil Prices Soar Amid Ongoing Tensions with Iran

Oil prices surged on Monday, causing stock markets to drop as investors worry about inflation and higher borrowing costs. The S&P 500 fell 0.4%, while the Dow Jones Industrial Average dropped 274 points, or 0.5%. The price of Brent crude oil reached $98.92 per barrel, a 1.5% increase.

The rise in oil prices is linked to ongoing tensions between the US and Iran over the Strait of Hormuz, which has been closed due to the conflict. President Donald Trump rejected an Iranian proposal to reopen the strait and resume talks on its nuclear program.

Despite efforts by mediators to negotiate a deal, the price of Brent crude oil continued to climb, reaching as high as $101 per barrel before paring its gains. The increase in oil prices has worsened inflation, with the average price for a gallon of regular gasoline up to nearly $4.48 from $3.13 a year ago.

The rise in Treasury yields has also put pressure on the economy, making borrowing money more expensive and undercutting prices for stocks and other investments. The yield on the 10-year Treasury rose to 5.21% from 5.17%, its highest level since 2007.