Economist Mohamed El-Erian said on Monday that even if the Iran war ends and oil prices fall back, US Treasury yields are still likely to remain elevated.

The chief economic adviser at Allianz Group said in an interview that the surge in energy prices has certainly worsened the upward pressure on yields, but a deeper imbalance between bond supply and demand still persists.

"I want to highlight one fundamental issue — even if oil prices are at a lower level, we will still face this yield problem. There is already an imbalance between demand and supply for long-term US bonds," he said on the program "Wall Street Morning Briefing."

At the time of the interview, the benchmark 10-year US Treasury yield had risen nearly 3 basis points to 5.209%, marking a multi-decade high.

Meanwhile, US crude oil prices stood at $94.96 per barrel.

"If the war is resolved, oil prices will fall back, and refined product supply will gradually increase. But I am willing to bet that the 10-year US Treasury yield will still remain around 5%. We are not going back to 4%, 4.5% or 4.25%, and the root cause is the severe supply-demand imbalance in the bond market," El-Erian said.