Global government bond yields rose to multiyear highs Tuesday as a lack of progress in resolving Middle East tensions lifted oil prices and sparked worries about risks of a prolonged period of elevated inflation.

The 30-year U.S. Treasury yield rose to 5.333% in European trade, its highest since 2007, according to Tradeweb data.

The 10-year Treasury yield increased to 4.748%, its highest since January 2025, while the 10-year German Bund yield climbed to 3.263%, a level unseen since 2011.

"The worsening situation in the Middle East is likely a factor in intensifying concerns over inflation and concerns over the U.S. fiscal position," said Derek Halpenny, head of research for global markets EMEA at MUFG.

"There remains zero appetite in the U.S. for addressing the U.S. fiscal position and that is increasingly weighing on the long-end of the curve," he said.

Yields on 10-year Japanese government bonds also hit a 30-year high of 2.955%, while the 30-year U.K. gilt yield hit a three-month high of 5.858%.

There were signs of escalation in the Middle East conflict, which added tension to bond markets.

The initial 60-day Memorandum of Understanding between the U.S. and Iran has expired without meaningful improvement in shipping conditions in the Strait of Hormuz, while President Trump has recently threatened to bomb Oman, alleging the country might be standing in the way of an agreement with Iran.

The spiraling debt outlook from funding the war and concerns about "Washington's lack of fiscal discipline" are weighing on bonds too, said Simon Ballard, chief economist at First Abu Dhabi Bank, in a note.

Oman borders the Strait of Hormuz in the south and is in talks with Iran to allow more commercial traffic in the waterway.

The price of a barrel of Brent crude rose 0.4% to $91.29, having traded below $80 in early August.

"Rising energy prices amid resilient macro data amplify headwinds for bond markets after key levels were taken out," Christoph Rieger, head of rates and credit research at Commerzbank, said in a note. "It is difficult to see a swift change of dynamics in the current environment."

President Trump's indication that he was not inclined to extend the expiring agreement with Iran "has added to concern that diplomatic off-ramps are narrowing," while the Strait of Hormuz remains the key risk channel, Patrick Munnelly, market strategist at the Tickmill Group said.

The pressure is no longer confined to U.S. Treasurys, with yields rising to multiyear or multidecade highs across Asia and Europe.