Oil markets have sharply reversed recent optimism, with Brent crude rising back above $100 a barrel after US-Iran talks collapsed and tensions escalated around the Strait of Hormuz, according to the Financial Times. This latest development signals a more prolonged disruption to global supply, with a potential loss of Iranian exports adding to existing constraints. For investors, this raises fresh concerns that inflation could remain elevated, particularly as energy costs feed through to transport and household bills. In the UK, where inflation has already surprised on the upside, this may complicate the Bank of England's plans for further rate cuts. Markets reacted swiftly, with oil prices surging and energy stocks outperforming, while bond yields could face upward pressure as inflation expectations firm.