Brent Tops $95 as the 10-Year Yield Hits a Two-Year High
U.S. forces began striking Islamic Revolutionary Guard Corps targets in Iran at 12 p.m. ET on Tuesday. CENTCOM said the strikes followed attempted attacks on commercial shipping and American service members around the Strait of Hormuz; Iranian state media reported explosions on Qeshm Island, in the ports of Bandar Abbas and Chabahar, and near Jask and Sirik. Two supertankers, one Saudi-owned and one South Korean-owned, were hit by projectiles while transiting the strait Tuesday morning. The line that set the pricing came from Iranian parliament speaker Mohammad Baqer Qalibaf: "If the enemy wants us not to export oil from the Persian Gulf, no one will be able to export oil." President Trump said any retaliation would be met with a far heavier response, and Treasury Secretary Scott Bessent announced new bank sanctions.
The market response landed in crude: Brent is up 0.57% this morning at $95.19 and WTI up 0.32% at $90.51. Brent gained more than 4% in Tuesday's session. The mechanism is not an actual loss of supply but the pricing of a possible one: Hormuz carries roughly a fifth of global oil trade, and Persian Gulf output is running at about two-thirds of pre-war levels, with part of the export flow rerouted by pipeline to the Red Sea and the Gulf of Oman. Energy was the one sector up on Tuesday, gaining 2.11% while the indexes fell.
Crude fed through to bonds via inflation expectations: the U.S. 10-year yield reached 4.81% this morning, its highest since November 2023.
