Hopes for a ceasefire between the US and Iran dashed! Brent crude returns to the $95 mark, geopolitical risk premium fully back

```

The ongoing escalation of the US-Iran conflict is leading the global energy market to reprice for a prolonged supply shock.

On Wednesday, Brent crude oil briefly broke above $95 per barrel, reaching a six-week high with an intraday gain of nearly 5%. Meanwhile, both the US and Iran have clearly signaled a refusal to negotiate, making market expectations for a short-term ceasefire close to zero. The rise in oil prices is no longer driven purely by supply and demand logic—geopolitical risk premiums are becoming a structural anchor in the pricing system.

According to CCTV News, on the night of the 21st local time, the US military stated that it had begun its latest round of airstrikes against Iran, marking the eleventh consecutive night of US strikes. The strikes extended for the first time to military targets near the northwestern city of Tabriz, and also hit Abdanan and Jowar in western Iran, near the Iraqi border. Iran immediately retaliated with drones and missiles, targeting US bases in Kuwait, Bahrain, and Jordan.

A spokesperson for the Iranian Ministry of the Interior made it clear: "There are currently no negotiations, only exchanges of information." Iranian lawmaker Qashqavi also denied Trump's claims that Iran seeks negotiation. The surge in oil prices has spilled over to the bond market, with US 10-year and 30-year Treasury yields rising to about a two-month high, triggering increased market bets on a Federal Reserve rate hike.

Conflict escalates, Hormuz Strait blockade risk intensifies

The US-Iran military confrontation has entered its eleventh consecutive night of clashes, with fighting continuing to spread.

The US military expanded its strikes to Tabriz, the first attack on the region since the conflict intensified two weeks ago, indicating that the geographical scope of US bombing operations is pushing further into Iran’s interior.

US Central Command (CENTCOM) stated that this round of strikes targeted Iranian military command centers, maritime operational capabilities, aircraft hangars, drone storage facilities, and military logistics infrastructure, aimed at further weakening Iran's ability to threaten commercial shipping through the Strait of Hormuz. CENTCOM also claimed that since early May, the US military has assisted about 900 ships, carrying a total of 450 million barrels of crude oil, in passing through the Strait of Hormuz.

However, Iran’s military chief Amir Hatami clearly stated that Iran controls the Strait of Hormuz and will open fire on US forces. According to Kpler data, only three cargo ships passed through the Strait of Hormuz that day, indicating a level of disruption far higher than official reports. Meanwhile, Iran-backed Houthi forces announced their deployment near the Bab el-Mandeb at the southern end of the Red Sea, preparing to launch maritime attacks on ships attempting to dock at Saudi ports, presenting dual threats to global shipping lanes. The world’s third-largest container shipping company, CMA CGM, announced it will impose an emergency fuel surcharge effective August 1.

Diplomatic deadlock, negotiation window effectively closes

Diplomatic efforts have failed to yield any substantive progress. On Tuesday, Iranian Interior Minister Eskandar Momeni visited Pakistan—a main mediator in the conflict—but after the visit, tensions showed no sign of easing. Iran later stated the situation is now limited to “information exchanges” and accused the US of violating the provisional ceasefire agreement signed on June 17, saying the agreement is “virtually worthless.”

When asked by reporters, Trump downplayed the prospect of negotiations, saying, “They are eager to meet, but until they are prepared to meet in a meaningful way, we are not interested.” He also hinted that the US military may strike Iran’s suspected nuclear site “Mount Pickaxe” and reiterated that military operations would continue. Secretary of State Rubio on Wednesday accused Iran of failing to comply with the Hormuz Strait agreement, calling Iran’s persistent demand for control over the strait the main obstacle to negotiations, but also stated that the US remains “committed to diplomatic solutions.”

Iran, for its part, warned that any US attack on its nuclear sites or other sensitive infrastructure would be met with a “strong response” and said that if US troops entered Iranian territory, they would face “the full resistance of millions.”

Energy prices rise across the board, inflation pressures reignite

Soaring oil prices are rippling across broader energy and financial markets.

Brent crude touched an intraday high of $95.24 per barrel, while WTI rose to around $88.25 per barrel, with both benchmarks gaining over 4% in a single day. European refined fuel prices climbed in tandem, with wholesale diesel prices rising significantly.

Natural gas markets are also under pressure. The benchmark Dutch TTF gas front-month contract rose above €62/MWh, higher than the previous day’s level of below €60. Goldman Sachs has raised its TTF forecasts for Q3 and Q4 to €60 and €53 per MWh respectively, up from previous estimates of €41 and €40, citing a delay in Persian Gulf LNG export normalization until October 2026.

Rising inflation expectations are hitting bond markets. The US 10-year Treasury yield rose to 4.63%, reaching nearly a two-month high, while the 30-year real yield rose to 2.93%, its highest since 2008. The market-implied probability of a Fed rate hike in July rebounded to 26%. Gold prices surged above $4,100 per ounce, while silver and copper prices also climbed, and short-term inflation swap rates rose across the board.

Risk Disclosure and DisclaimerMarkets are risky; investments should be made with caution. This article does not constitute individual investment advice and does not consider any specific user's investment objectives, financial situation, or needs. Users should assess whether any opinions, views, or conclusions herein suit their own circumstances. Investment decisions are made at your own risk. ```