Oil prices are approaching $100 a barrel, with diesel fuel futures reaching all-time highs. This surge reflects investors recognizing the impact of escalating tensions with Iran. Higher energy costs are now broadly affecting economies worldwide, increasing expenses for consumers, businesses, and governments. These rising energy prices are a significant contributor to higher bond yields, causing concern among global policymakers. After an initial dip, oil prices began climbing in July due to renewed conflict in the Strait of Hormuz. Recently, tensions have intensified, pushing Brent crude prices to $95 per barrel. Consequently, the 10-year Treasury yield is nearing a three-year high, as are government bond yields internationally. Increased oil prices are fueling inflation expectations, as higher energy costs impact both production and transportation expenses. This, in turn, drives up bond yields as investors demand compensation for inflation. Higher inflation also affects stock valuations as future earnings projections are adjusted downwards. The correlation between oil prices and the 10-year Treasury yield is strengthening, indicating they are moving in tandem. Conversely, the correlation between stocks and oil is increasingly negative, with stocks declining as oil rises. While other factors also influence bond yields, the current energy price shock is becoming too significant for global markets to disregard.