Oil prices have continued their upward trend for a third consecutive session, exerting pressure on global markets. Brent crude, the international benchmark, rose above $95 on Wednesday morning, marking its highest point in nearly six weeks.
This increase follows a renewal of hostilities between the US and Iran, which has heightened concerns regarding the safety of shipping routes for oil through the Middle East. The US military initiated fresh strikes against Iranian targets near the Strait of Hormuz, described by President Donald Trump as retaliation for alleged attempts to lay mines and an earlier attack on a US military base.
The soaring energy prices are contributing to a deepening global bond rout. UK borrowing costs have reached their highest level since the financial crisis, with gilt yields hitting an 18-year high of approximately 5.2 per cent. Longer-term gilt yields also jumped to 5.9 per cent in early trading on Tuesday.
Kathleen Brooks, research director at XTB, noted that with US mid-term elections two months away, President Trump shows no sign of de-escalating the conflict, which could trigger volatility as investors anticipate sustained elevated oil prices.