Oil Prices Surge Past $100 as U.S.-Iran Peace Hopes Collapse

Global oil markets turned sharply higher on Friday as diplomatic efforts between the United States and Iran appeared to unravel, pushing Brent crude above $100 per barrel for the first time in recent weeks. The escalation has rattled energy markets worldwide and stoked fresh fears of an inflation crisis driven by soaring fuel costs.

Brent crude futures surged 4.3% to $112.60 a barrel, while U.S. West Texas Intermediate climbed 5% to $99.28, erasing the weekly losses both contracts had recorded earlier after President Trump suggested peace talks were progressing.

Tensions intensified after Iran's Foreign Minister Abbas Araghchi announced that Israel had struck two of the country's largest steel factories, a power plant, and multiple civilian nuclear sites — moves he said directly contradicted Trump's extended diplomatic deadline set for April 6. Araghchi warned Iran would respond with serious consequences.

At the center of the crisis is the Strait of Hormuz, a critical shipping chokepoint through which approximately one-fifth of global oil supply passes. Trump had threatened military strikes on Iranian energy facilities if the waterway remained blocked, while Tehran publicly denied participating in any negotiations with Washington. U.S. Secretary of State Marco Rubio addressed G7 allies in France, calling any attempt by Iran to impose a tolling system on the strait illegal and unacceptable, and urging international cooperation to keep global shipping lanes open.

Analysts warn the price volatility is unlikely to ease soon. Markets remain highly reactive to every development, creating a feedback loop of headlines and price swings. Rising oil prices are now driving government bond yields higher, with the U.S. 10-Year Treasury yield reaching its highest point since July, as central banks face pressure to maintain elevated interest rates to combat potential energy-driven inflation.