Brent crude surged to $119.45 a barrel, nearing its highest level in four years, as the US-Iran standoff over the Strait of Hormuz deepened. Shipping through the strategic waterway, which handles 20% of global oil flows, remains halted due to Iranian threats and a US naval blockade. Prices climbed 7.3% in eight straight sessions, with traders betting the blockade could persist for months rather than days.

US President Donald Trump reiterated his resolve to maintain the blockade until Iran addresses nuclear concerns, calling it "more effective than bombing." Analysts note that uncertainty around the strait’s reopening has stifled price gains, despite UAE plans to boost production to 4.5 million barrels daily if tensions ease. However, UAE output has plummeted since the conflict began, undermining its ability to offset shortages.

European bond markets reacted sharply, with two-year UK gilt yields crossing 4.5%, the highest since March. Investors anticipate central banks will hike rates to combat inflation fueled by soaring energy costs. The European Central Bank is poised for three quarter-point increases by year-end, while the Bank of England faces similar pressure.

The crisis underscores how geopolitical ruptures can morph into prolonged economic shocks. As oil prices and bond yields remain intertwined, markets brace for a prolonged period of volatility, with no immediate resolution in sight.