Treasury Secretary Scott Bessent has a lot of plates spinning at the moment. Even as he hosts the G-20, he is busy defending his attempts to manage the yen-dollar exchange rate, long-term Treasury yields and a renewed trade war with Canada.

Crucially though, it is the jump in oil prices that is suddenly making that juggling act harder.

Long-term bonds issued by the world's major industrialized nations are slumping. On Tuesday, yields on German, U.K. and Japanese 10-year government bonds hit their highest levels since 2011, 2008 and 1996 respectively. In U.S. trading, the 10-year Treasury yield was only up slightly, albeit at levels rarely seen since the financial crisis.

It is tempting to blame it all on fiscal irresponsibility-and some related trigger like Tokyo's latest budget plan. But the worldwide nature of the selloff points to a global factor like oil prices, not something country-specific.

The truth is that years of fiscal stimulus and military spending, following the twin crises of Covid and Russia's invasion of Ukraine, have left major industrialized nations in a weakened fiscal position. And those accumulated deficits were effectively the dry timber that the Iran war now threatens to set ablaze.

What was the immediate cause of the latest leg down in bond prices? Clearly it was the renewed hostilities between the U.S. and Iran, which have sent Brent crude oil prices up 4.5% in two days. That global energy benchmark is now up 51% since the start of the year.

This creates policy headaches everywhere. In Europe for instance, data out Tuesday showed eurozone inflation accelerated to 3.3% in August from 2.9% in July. Higher oil prices only exacerbate that trend.

Inflation worries are pressing authorities in Japan, too. In a meeting with Japan's central-bank governor and finance minister at the meeting of the Group of 20 advanced and developing economies, Bessent apparently told them that "Japan needs to make clear to the market that it is moving toward higher interest rates and fiscal sustainability," according to Japanese broadcaster NHK.

They could have fairly said the same to him about the U.S., of course. But when asked about the Federal Reserve's next move in an interview with CNBC, Bessent commented that central banks don't traditionally raise rates in response to supply shocks absent "second or third-order effects."

In fact, and to his credit, Federal Reserve Chairman Kevin Warsh pointed to signs of some such effects in his speech at Jackson Hole last week. Within the basket of goods that make up the Fed's favored inflation measure, 54% of goods prices are up more than 3% from a year earlier, he noted.

That is well above a historical average of around 32%. Though Warsh didn't say so explicitly, this looks like an indication that higher energy prices are seeping into broader inflation pressures.

As for third-order impacts, at this point the blow to global bond markets from higher inflation fears must already be counted as one such ripple effect.

Central bankers can help shore up confidence through responsible tightening. Fiscal consolidation would help, too, though it is much less likely in the foreseeable future.

Until the situation in the Persian Gulf is stabilized, however, those efforts might only help at the margins. And the risk will keep rising that Bessent's spinning plates come crashing down.