WASHINGTON — U.S. forces struck two empty Iranian oil tankers in the Strait of Hormuz, Central Command said today, prompting crude futures to jump on renewed supply disruption fears through the world's most critical energy chokepoint.
The overnight strikes targeted unoccupied vessels in the strait, which handles 20 percent of global petroleum flows daily. Initial reports indicated no casualties.
West Texas Intermediate crude rose 4.2 percent to $78.45 per barrel as traders priced in higher geopolitical risk premiums for Middle East shipments. The energy spike immediately pressured Treasury markets, with the 10-year yield climbing 8 basis points to 4.18 percent as investors recalibrated inflation expectations.
The oil rally threatens to complicate Federal Reserve policy deliberations, potentially extending the central bank's restrictive stance as policymakers weigh persistent energy-driven inflation against economic growth concerns. Fed funds futures now price just 35 percent odds of a rate cut by June, down from 52 percent before the strikes.
Fixed-income markets face conflicting forces as geopolitical risk typically drives safe-haven flows into Treasuries while sustained energy price increases raise duration risk across the curve. The 2-10 year spread flattened 3 basis points as short-end yields rose faster than long-term rates.
The Pentagon will brief on the strikes at 10 a.m. tomorrow, with markets watching for details on rules of engagement and potential Iranian retaliation. Global energy ministers plan an emergency session next week to discuss strategic reserve releases.
