Live updates: US-Iran war news; Oil prices at highest level since July as fresh strike reported on vessel in Strait of Hormuz

Oil prices and government borrowing costs climbed higher on Tuesday as traders’ hopes of a swift resolution to the US-Iran conflict fade.

Brent crude futures, the global oil benchmark, was up 0.1% to $91 a barrel early morning ET – its highest level since late July. WTI futures, the US benchmark, rose 0.7% to $85.

Washington and Tehran agreed in June to a 60-day ceasefire, allowing time to negotiate a more durable peace deal while active fighting subsided and the Strait of Hormuz could be reopened.

But that agreement, which had already effectively collapsed, officially expired on Monday with no sign of a breakthrough and as tensions have escalated. On Monday, President Trump threatened to bomb Oman, a US ally, if it interfered with US efforts in the strait – sparking further concern among traders that a peace deal may still be far off.

US government bond yields – essentially, the interest the government must pay to borrow money from investors – were rising Tuesday as traders anticipate that a prolonged US-Iran conflict will keep energy prices high, in turn, boosting the odds that central banks will raise interest rates to keep inflation in check. Other factors, including enormous public debt piles, are also contributing to elevated yields.

The yield on the US 30-year Treasury bond rose to an intraday high of 5.33% on Tuesday, its highest level in nearly two decades, according to Reuters. The yield on the German government’s 10-year bond hit a 15-year high, the publication said.

Deutsche Bank analysts said on Tuesday that 30-year government bond yields had “hit multi-year highs across several countries, (showing) how the fiscal pressures on governments aren’t going away.”