Oil Tops $100 as U.S.-Iran Strikes Rattle Hormuz Trade

Crude benchmarks have broken decisively above the $100 mark as U.S.-Iran military strikes revive worst-case scenarios for one of the world's most critical chokepoints. The Strait of Hormuz, through which a huge share of global seaborne oil flows, has become the epicenter of a geopolitical risk premium that traders had largely priced out of the market until this week.

The rally, however, carries a sting in its tail. Global bond yields have surged to levels unseen since 2008, driven by fears that sustained high energy costs will keep inflation entrenched even as new Fed leadership signals a hawkish tilt. That combination risks converting today's supply-shock rally into tomorrow's demand-destruction story, a dynamic commodity traders are watching closely as yield curves steepen further.