Global oil prices have surged back to $100 a barrel, as diminishing hopes for a US-Iran peace deal cast a shadow over international energy markets.Despite this, financial markets experienced a mixed morning, with UK stocks seeing gains and government borrowing costs falling to their lowest point in a month. Brent crude oil prices climbed by approximately 3.5 per cent on Tuesday morning, recovering after a slight dip over the bank holiday weekend.Investors had been optimistic about ongoing discussions between the US and Iran, which were believed to be nearing a peace agreement that could lead to the reopening of the vital Strait of Hormuz. However, the US military confirmed on Monday that it had conducted “self-defence” strikes in southern Iran, even as President Donald Trump said in a social media post that negotiations were “proceeding nicely”.Stock markets were on stronger footing, however, with the UK’s FTSE 100 up about 0.6 per cent on Monday morning, to 10,526.Oil carriers sail through the Strait of Hormuz on 22 May (Reuters)This was in contrast to European peers, with France’s Cac 40 falling by about 1 per cent, and Germany’s Dax index down 0.7 per cent.Meanwhile, the UK’s long-term borrowing costs were continuing to ease, having hit their highest level for 28 years earlier in the month.The yield on 30-year UK Government bonds, also known as gilts, was down by about five basis points to 5.53 per cent.Ten-year gilt yields were also down by five basis points to 4.86 per cent.US President Donald Trump said in a social media post that negotiations were ‘proceeding nicely’ (Alex Brandon/AP)Rich McDonald, market analyst for IG, said that it was a “messy” morning for global markets.“Oil initially fell around 7 per cent as traders hoped for the breakthrough promised by the American president, but confidence has since faded, with crude now rallying around 3 per cent from the overnight lows,” he said.“At best, the ceasefire appears to have been extended, talks are still alive, and that lowers the immediate risk of a fresh Hormuz shock – but we don’t yet seem to have made progress on the hard issues.“Enriched uranium, sanctions, regional security and the full normalisation of Strait of Hormuz flows all remain unresolved, with markets now awaiting progress reports from ongoing negotiations.”