The 10-Year Treasury Yield Topped 5% Monday for the First Time Since 2023. Diesel Hit a Record $6.23, Brent Passed $109, and Saudi Arabia's East-West Pipeline Is Still Shut.

The yield on the 10-year U.S. Treasury note briefly climbed above 5% on Monday for the first time since 2023, reaching as high as 5.014%, as crude oil surged and the national average price of diesel fuel set an all-time high of $6.23 a gallon. Brent crude, the international benchmark, traded above $109 a barrel, and U.S. crude came within striking distance of $105. The 30-year Treasury bond rose to 5.37%.

The trigger was Saudi Arabia's decision on Friday to shut its East-West pipeline, the 750-mile line that carries crude from the kingdom's eastern oil fields to the Red Sea port of Yanbu. The pipeline had become the kingdom's lifeline for exports since the U.S. and Israel launched their war on Iran on Feb. 28, letting Saudi crude bypass the Strait of Hormuz entirely. The Wall Street Journal reported the line had been hit repeatedly by drones launched from Iraq, and Riyadh described the shutdown as precautionary. Energy Secretary Chris Wright told reporters he did not yet know how long the closure would last. "I might have more of a time frame tomorrow," Wright said, adding that the Saudis "have been very carefully assessing what the damage was."

The strait itself has all but emptied. According to the tracking figures cited by NBC News, 14 vessels transited Hormuz on Sunday, 12 on Saturday, 11 on Friday and just nine on Thursday, a fraction of the pre-war flow. A meeting between Iran and the Gulf states scheduled to open Monday, at which Tehran was expected to present a plan with Oman for governing shipping through the strait, was postponed indefinitely on Sunday. Omani Foreign Minister Badr Albusaidi said the delay was "in the interests of consensus." Meanwhile, Iranian-backed Houthi forces have extended their control along the Bab el-Mandeb at the southern mouth of the Red Sea, threatening the route Saudi tankers were using instead.

The numbers behind the pump price are stark. Gasoline now averages $4.31 a gallon nationally, up 45% since the Iran war began, while crude is up roughly 50% over the same period and 80% since the start of the year. Diesel has risen 75% in 2026. It had fallen as low as $4.77 in late June before a 30% run-up that accelerated when Ukrainian drone strikes on Russian refineries prompted Moscow to ban diesel exports. "The growing scale and intensity of Ukrainian attacks on Russian refineries this year have pushed Moscow to ban diesel exports," ING commodities analysts wrote, noting the ban is set to expire at the end of September. President Donald Trump has publicly pressed Ukrainian President Volodymyr Zelenskyy on the issue. "Mr. Zelenskyy has to do one thing," Trump said. "He has to stop knocking out diesel fuel in Russia."

Economists warn diesel is the fuel that moves everything else. "The cost of diesel gets into just about everything," KPMG chief economist Diane Swonk said. "Everything gets that extra fee tacked onto it." Trucking, rail, farming and construction all run on it, which is why bond traders treat a diesel spike as an inflation signal rather than a one-off. Futures markets on Monday priced the probability of a Federal Reserve rate increase at Wednesday's meeting at greater than 90%, according to NBC News.

Stocks fell as the energy shock collided with a separate rout in artificial intelligence names after Anthropic's Dario Amodei and other industry leaders called for a slowdown in AI development. The Nasdaq 100 dropped 1.3%, the Nasdaq Composite fell 0.9% and the S&P 500 lost 0.6% by early afternoon. The last time the 10-year yield sat above 5%, in October 2023, mortgage rates were near 8% and the Fed was at the end of a hiking cycle. This time, markets are pricing a Fed that is about to start one.