When WTI jumped from approximately $96 to over $102 per barrel in a single day, and Brent broke through the $107 mark, the first reaction is to think about gas station prices. But the real impact this time comes from a different angle: through bonds and interest rates that determine the cost of mortgages, auto loans, and business credits worldwide.
The mechanism is simple yet unpleasant. More expensive oil brings higher transportation, production, and energy costs — and thus higher commodity prices. In the United States, this is already visible: the producer price index rose by 5.4% instead of the expected 5.2%. For the Federal Reserve, this is a signal that inflation has not yet been tamed.
Interest rates may rise instead of falling
Trump consistently pressures the Fed, demanding rate cuts to cheapen credit ahead of election cycles. But markets are now factoring in the opposite scenario: if oil continues to rise in price and inflation accelerates, the regulator will have to maintain or even raise rates.
The most notable indicator of this shift is the yield on 30-year U.S. Treasury bonds, which has exceeded 5.3%. This is the highest level since 2001, and it is precisely this yield that banks use as a reference when setting rates for long-term mortgage loans.
Markets reacted to mutual attacks between the U.S. and Iran on ships in the Persian Gulf and Trump's statements, which gave investors no reason to expect a quick end to the confrontation.
In other words, the average American who was planning to refinance a mortgage in hopes of cheaper money could get the opposite result — all because of events thousands of kilometers away from Washington.
Bab el-Mandeb as a second pressure front
In parallel, Iran-backed Houthis are advancing in southwestern Yemen, approaching the Bab el-Mandeb Strait — through which over 10% of global cargo traffic passes. The Houthis' capture of Mokha is already being interpreted as a direct signal of threat to energy routes through which oil and gas are transported from the Persian Gulf to Europe and Asia.
If control over the strait or surrounding waters becomes the subject of even more intense confrontation, insurance premiums for tankers and the cost of alternative routes around Africa will rise — and this is an additional inflationary impulse that will be layered on top of the existing one.
The question now is not whether gas will become more expensive at the pump — that has already happened. The question is whether the Fed can withstand political pressure and whether debt will have to be refinanced soon at rates higher than expected just a month ago.
