Oil Prices Surge as U.S.-Iran Tensions Threaten Hormuz Strait

Global oil prices hit multi-year highs on Monday after U.S. missile strikes against Iran raised fears of a supply disruption in the Strait of Hormuz, a critical chokepoint for crude shipments. The price of Brent crude climbed above $75 per barrel, its highest level since 2014, while U.S. West Texas Intermediate crude topped $70. The rally followed a U.S. military operation that killed a top Iranian general, prompting Tehran to vow retaliation. Traders are now focused on the Strait of Hormuz, a narrow waterway between Iran and Oman through which about 20% of the world's oil passes. Any Iranian attempt to block the strait could cut off supply from major producers like Saudi Arabia, Iraq, and the United Arab Emirates. The crisis has also pushed up yields on short-term government bonds, as investors flee riskier assets and seek safety in U.S. debt. The yield on the two-year Treasury note fell to its lowest point in weeks, reflecting growing uncertainty about global economic stability. Analysts warn that further escalation could drive oil prices even higher, straining economies already grappling with inflation. For now, markets remain on edge, awaiting the next move from both Washington and Tehran.