Rates and oil squeeze costs

Treasury yields and oil prices both moved higher on April 22, leaving contractors squeezed by costlier borrowing and costlier fuel at the same time. (cnbc.com) The 10-year Treasury yield rose above 4.30%, the 2-year reached 3.80%, and the 30-year climbed to 4.909% after President Donald Trump announced an indefinite extension of the U.S.-Iran ceasefire. (cnbc.com) Brent crude, the global oil benchmark, climbed 3.5% to $101.91 a barrel on April 22 as traders focused on uncertainty around Iranian conflict and restricted traffic through the Strait of Hormuz. (local10.com) Treasury yields are the baseline for a wide range of loans, so higher yields tend to keep financing expensive for work vans, equipment, and credit lines even when a company is not borrowing directly from the federal government. The St. Louis Fed’s rate pages show auto-loan series for new and used vehicles were still updating through mid-April 2026, a sign that vehicle financing remained a live cost issue as market rates stayed elevated. (fred.stlouisfed.org) Oil hits contractors through more than gasoline. The Energy Information Administration said on April 7 that limited oil flows through Hormuz pushed an estimated 7.5 million barrels a day of crude offline in March and 9.1 million barrels a day in April, while diesel prices were set to peak above $5.80 a gallon in April. (eia.gov) That diesel spike feeds directly into freight bills, delivery charges, and jobsite operating costs because trucks, generators, and many heavy machines run on distillate fuels. The Energy Information Administration also said higher crude prices were lifting both gasoline and diesel, with diesel staying especially high because global supplies were tight and U.S. inventories were below the 2021-2025 average. (eia.gov) Oil also shows up inside materials. The Bureau of Labor Statistics’ producer price index for plastics material and resin manufacturing rose to 312.519 in March 2026 from 304.86 in February, pointing to fresh pressure on plastic pipe, insulation, packaging, sealants, and other petroleum-linked inputs. (fred.stlouisfed.org) The ceasefire extension eased fears of an immediate escalation, but it did not restore normal shipping through the Persian Gulf. The Energy Information Administration said its April forecast still assumed a risk premium would keep Brent above pre-conflict levels for months, with a second-quarter 2026 peak near $115 a barrel before easing later in the year. (eia.gov) For contractors bidding spring and summer work, that leaves two moving targets on the same estimate sheet: interest expense on financed purchases and oil-linked costs in freight, plastics, and fuel. If yields stay near April 22 levels and Brent stays near $100, the margin cushion on fixed-price jobs gets thinner fast. (cnbc.com; local10.com; eia.gov)