Euro borrowing costs stay high as Trump tightens Iran oil blockade

European government bond yields remain near their highest levels in years, driven by US President Donald Trump’s renewed push to tighten the blockade on Iranian oil exports. The move has rattled global energy markets, pushing up oil prices and fueling inflation fears across the eurozone. Investors now expect the European Central Bank to keep interest rates higher for longer to combat rising costs. As a result, the yield on benchmark 10-year German bonds—a key gauge of eurozone borrowing costs—has held steady near multi-year peaks. The US blockade aims to cut off Iran’s oil revenue, but its side effects are now shaping monetary policy in Europe. Higher energy prices squeeze consumers and businesses, making it harder for the ECB to cut rates even as the eurozone economy slows. Analysts warn that if the standoff escalates, eurozone yields could climb further, raising borrowing costs for governments and companies. For now, markets are watching for any sign of de-escalation—or a new spike.