The United States launched a fresh round of strikes on Iranian military targets on Tuesday, the second in three days after a month of relative calm. Oil prices and government bond yields jumped as investors fretted that higher oil prices will worsen inflation.
American forces began attacking Islamic Revolutionary Guard Corps targets on Tuesday in response to Iran's targeting of US troops and commercial ships transiting the Strait of Hormuz, the second round of US strikes in three days after a month of relative calm in a war that plunged the Middle East into crisis and sent global energy prices soaring. President Donald Trump said on Truth Social that the strikes were retaliation for Iran's failed attempt to lay sea mines in the strait and for firing missiles at a US base in Jordan, warning that if Tehran hit back, "they will be hit again at a much harder and higher level". Iranian media reported that Tehran had launched retaliatory strikes but gave no details of what was targeted.
Oil surges as tanker attacks resume
The strikes followed attacks on two oil tankers, one South Korean and one Saudi Arabian, shuttling crude out of the Gulf on Monday night. Brent crude, the international benchmark, rose 5% to $94.98 a barrel, while US marker West Texas Intermediate climbed 5.4% to $90.36.
Bond markets flag inflation risk
The renewed fighting also pushed government borrowing costs higher. The US 10-year Treasury yield rose 0.05 percentage points to 4.79%, its highest level since early 2025, a benchmark used to price trillions of dollars in assets worldwide. Japanese 10-year yields had earlier hit their highest level since 1996, and UK gilt yields reached their highest point since 2008, as investors bet that pricier oil will keep inflation elevated.
Blockade dispute keeps the ceasefire out of reach
Iran's parliamentary speaker, Mohammad Bagher Ghalibaf, warned that Iran would use military force to break a US naval blockade on its ports, saying no oil would be exported from the Gulf if Tehran were prevented from selling its own crude. Trump reimposed the blockade after a June memorandum of understanding, under which the parties had agreed to extend an April ceasefire by 60 days and gradually reopen the Hormuz strait, collapsed. That deal began unravelling in early July after Iran accused ships of using an "unauthorised" route through the strait and began attacking vessels, though there had been no significant attacks since the US paused strikes in late July. Trump said on Monday the US was safely guiding 30 tankers through the strait nightly, a waterway through which a fifth of the world's oil transited before the war.
Source: Financial Times
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