Oil Prices Soar on US-Iran Diplomacy Stalemate and Strait of Hormuz Concerns

Oil prices continue to rise, with Brent crude reaching new highs. According to Deutsche Bank's Henry Allen and Jim Reid, the recent surge is driven by stalled US-Iran diplomacy and skepticism over a Strait of Hormuz reopening.

The bond selloff has contributed to higher oil prices, with yields increasing overnight. The rejection of Iran's proposal by President Trump on the weekend led to a 0.92% rise in Brent crude to $105.28/bbl yesterday, followed by another 1.92% increase to $107.30/bbl this morning.

Investors are pricing in a prolonged period of high oil prices well into 2027, with the December 2027 Brent future reaching a new high of $80.29/bbl yesterday and increasing to $80.67/bbl today.