MUMBAI: Indian government bonds declined on Monday, as oil prices jumped after military conflict in the Middle East looked set to last for weeks, pushing investors away from risk assets. The benchmark 6.48% 2035 bond yield was at 6.6894% as of 10:05 a.m. IST, after ending at 6.6601% on Friday. Bond yields move inversely to prices. The rupee fell 0.4% to 91.35 per dollar while shares fell 1%. The US and Israel launched their most ambitious attacks on Iran in decades on Saturday, killing Supreme Leader Ayatollah Ali Khamenei and sinking Iranian warships. Israel launched new air strikes targeting Tehran and expanded its military campaign to include attacks on Iran-backed Hezbollah militants in Lebanon on Monday, as US President Donald Trump signaled the military assault could continue for weeks. Oil prices surged as the conflict disrupted shipments. The benchmark Brent crude contract shot up to $82.37, its highest since January 2025, before coming off to $77.10 per barrel. India relies on imports for most of its crude oil needs and higher prices could push up inflation and widen the current account deficit. The Middle East caters to a little over half of India’s crude oil supplies. The market is seeing some early selling in longer-dated bonds, a trader with a foreign bank said. “Investors will wait for any firm direction from the swap market for confirmation on whether the move is just a knee-jerk reaction or the start of a sustained rise in yields.” Traders remain hopeful that the central bank may buy bonds in the secondary market if yields rise further.