Oil Prices Surge to $98 as Global Bonds Face Sell-Off
Miles Bennett
Brent crude hit $98.42 a barrel intraday as the US-Iran conflict escalated, up nearly 40% from early-July levels and triggering a global bond rout that pushed sovereign yields to multi-year highs.
How far has oil climbed — and why?
Brent crude touched $98.42 a barrel intraday, up sharply from above $70 in early July.
The core driver is the escalating US-Iran conflict, which has raised fears of a Middle East supply disruption.
This means → the rally is not demand-driven good news; it is a geopolitical risk premium — costs rise while the economy does not improve.
What is happening in bond markets?
Germany's 10-year yield rose to 3.21%, the highest since 2011; France's 10-year hit 4% for the first time since 2009.
The US 10-year yield climbed to 4.68% intraday, just shy of the 4.69% peak set when the Iran conflict first erupted.
In plain terms = rising yields mean falling bond prices — investors worldwide are dumping bonds because they expect inflation to stay stubborn and rates to stay high.
Is there still room for central banks to cut?
Elevated oil prices are forcing markets to reprice the rate path: if crude stays near current levels, the window for rate cuts narrows further.
Mike Bell, head of market strategy at RBC BlueBay Asset Management, said: "Investors wanted to move on and forget about Hormuz, but that was always wishful thinking. Burying your head in the sand is not a strategy for political risk."
This means → whether bonds stabilise depends not on economic data but on whether the US-Iran standoff sees a real de-escalation — geopolitics has become the lead actor in rate pricing.
Content is for reference only, not financial advice.