US-Iran Conflict Drives Oil Prices Above $100 per Barrel

Escalating tensions between the US and Iran have reignited fears of a prolonged Middle East conflict, pushing regional oil benchmarks above $100 per barrel. The recent exchange of direct US-Iran attacks has sent shockwaves through the market, with President Trump threatening further strikes against Tehran.

The Hormuz transits have become increasingly difficult due to Washington's sanctions on Iran, which have already been met by Iranian drone attacks. Saudi Aramco attempted to boost flows from the Persian Gulf but was immediately hindered by Tehran's countermeasures.

As a result, oil prices have surged, with ICE Brent currently trading at $92 per barrel. However, Middle Eastern benchmarks have moved past $100 per barrel again.

The escalating conflict has also had an impact on global bond yields, which have risen to their highest since 2008. Rising bond yields have slowed down economic growth by increasing borrowing costs for households and companies, leading to demand destruction in various sectors such as vehicle purchases, air travel, construction, manufacturing, and freight.