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U.S. Treasury yields advanced on Thursday as oil prices staged a comeback amid heightened tensions in the Middle East.

The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — was last up 5 basis points at 4.707%. The yield reached its highest level since Jan. 15, 2025, when it hit 4.790%.

The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, rose more than 4 basis points to 4.343%. The longer-dated 30-year Treasury bond yield was higher by more than 4 basis points to 5.188%.

One basis point is equal to 0.01%, and yields and prices move inversely to each other.

Oil prices continued to climb on Thursday, with Brent crude futures once again approaching $100 per barrel, following reports of attacks on tankers off the coast of Saudi Arabia and the U.S. renewed threats to escalate strikes against Iran.

Brent crude futures for July delivery gained 5% to trade above $99 a barrel and hit their highest level since before the U.S. and Iran reached an agreement last month to end to war in the Middle East. U.S. West Texas Intermediate crude futures advanced around 4% to above $90 a barrel.

Meanwhile, jobless claims for the week ended July 18 came in at 187,000, below the 212,000 that economists polled by Dow Jones were expecting. Investors will be looking ahead to the latest S\&P Global Flash U.S. PMI report due Friday, which measures the economic health of American manufacturing and services sectors.

"The economy may be heating up today, but the path ahead for the employment markets could still be rockier with the escalation of the war in the Middle East causing a u-turn in energy prices virtually overnight this week," said Chris Rupkey, FWDBONDS chief economist.

Government bond yields also moved higher across Asia and Europe on Thursday. The yield on the U.K. 10-year government bond rose 4 basis points to above 5% as new prime minister Andy Burnham cut property taxes on hospitality venues, contributing to investor unease.

Burnham's 20% cut on business rates will cost roughly £100 million ($134 million) and aims to protect pubs, clubs and music venues from higher costs.

— CNBC's Chloe Taylor also contributed to this report.