Oil price tops $120 a barrel after Trump warns Iran blockade could last ‘months’

Brent crude spiked above $126/bbl, up more than 13% in 24 hours, after Trump signalled the US blockade of Iranian ports could last for months and talks remained stalled. The move marks oil’s highest level since 2022 and has revived fears of a prolonged Hormuz supply shock, with analysts warning that a six-month impasse could push crude toward $190/bbl. The macro spillover is becoming the main market story: Deutsche Bank’s Jim Reid said the oil shock is feeding stagflation fears and pushing sovereign yields higher, with Japan’s 10Y at 2.51%, German bunds at 3.11% and UK gilts at 5.07% in the commentary cited. Paul Krugman argued markets are underestimating the risk of a broader recession if the strait stays closed for another three months. For precious metals, the immediate takeaway is inflation-and-risk premium support rather than a direct flow event. A sustained oil spike strengthens the case for gold as a stagflation hedge, but tighter bond yields can offset that if real rates continue to rise. Near-term focus is on whether the blockade persists into the next set of central-bank and inflation prints, and whether markets start repricing a higher-for-longer rates path.