Oil Prices Top $90 as Hormuz Tensions Rise After Deadline Passes

Oil markets reacted sharply on Tuesday after the deadline for US-Iran peace talks expired without agreement, sending Brent crude above 90 dollars a barrel for the first time since late July. The spike followed Iranian warnings of a shift to offensive operations and fresh remarks from President Trump threatening to bomb Oman if it interfered with American plans in the Strait of Hormuz.

The two-month window for negotiations closed Monday with no breakthrough, leaving the conflict between the US, Israel and Iran unresolved. Iranian officials told Reuters they would adopt a fully offensive military posture, and a vessel was attacked in the strait early Tuesday according to the UK Maritime Trade Operations agency. Roughly a quarter of global seaborne oil normally transits the waterway, and any sustained disruption raises immediate concerns about supply.

Trump told Fox News he expected Tehran to surrender and warned Oman directly. If Muscat gets in the way we will bomb the shit out of them, he said, marking the second time he has directed such language at the longtime US partner. Analysts noted the comments could move markets from pricing short-term volatility to expecting a drawn-out crisis. Angeline Ong of IG said the threat narrows diplomatic options and signals traders to add energy positions rather than sell the rally.

US stock futures fell in response. Contracts on the S&P 500 slipped 0.4 percent while Nasdaq-100 futures dropped 1 percent. The Dow Jones Industrial Average futures were little changed. West Texas Intermediate crude climbed toward 84 dollars a barrel. The Strategic Petroleum Reserve has reached its lowest level since 1982, adding to worries that higher energy costs will feed through to inflation and consumer prices.

Bond yields rose alongside oil. The 10-year Treasury yield reached 4.72 percent and the 30-year yield hit 5.31 percent, a level not seen in nearly two decades. Traders cited both elevated oil prices and uncertainty over future government borrowing as factors lifting rates.

The developments come as earnings season continues with mixed signals for equities. Home Depot reported stronger-than-expected sales for the second quarter, helped by customers focusing on smaller home projects, and its shares rose modestly in premarket trading. Still, the broader market tone remained cautious as geopolitical risks overshadowed corporate results.

Iranian military spokesperson Ebrahim Zolfaghari was quoted by Fox News warning that vessels attempting passage through the strait would face new restrictions. Markets have priced in the risk of reduced flows, but further escalation could push prices higher and increase pressure on economies already contending with elevated borrowing costs.