Oil Prices Rise Amid US Military Strikes on Yemen’s Houthis

Oil prices edged higher on Monday following the United States’ pledge to continue striking Yemen’s Houthi rebels until the Iran-aligned group ceases its attacks on commercial shipping.

Brent crude futures increased by 48 cents, or 0.7 percent, reaching $71.06 per barrel by 9:54 a.m. Saudi time. Similarly, US West Texas Intermediate (WTI) crude climbed 47 cents, also 0.7 percent, to $67.65 per barrel.

The surge comes after US airstrikes in Yemen resulted in the deaths of at least 53 people, according to the Houthi-run health ministry. This represents the most extensive US military operation in the Middle East since President Donald Trump assumed office in January. A US official, speaking to Reuters, suggested that the campaign could continue for weeks.

Houthi assaults on Red Sea shipping routes have disrupted global trade, prompting the US military to undertake costly measures to intercept missiles and drones. These ongoing conflicts have contributed to fluctuations in global oil prices, which saw a minor increase last week, breaking a three-week losing streak driven by fears of an economic slowdown and escalating trade tensions.

Despite the rise in oil prices, early Asian trading on Monday saw prices climb over 1 percent before paring gains. China reported a mixed economic performance for the beginning of the year, with industrial output slowing in January and February, while retail sales saw a slight acceleration, according to government data.

In response to the economic strain, China’s State Council announced a “special action plan” on Sunday aimed at stimulating domestic consumption and supporting economic recovery. The move follows the imposition of extensive US trade tariffs against key trading partners, including China, which has further complicated global trade relations.

Amidst these developments, Goldman Sachs revised its oil price forecasts downward, citing concerns over slower-than-expected US economic growth due to trade tariffs on countries like Canada, China, and Mexico. The firm lowered its December 2025 Brent crude price forecast by $5 to $71 per barrel, with WTI projected to reach $67 per barrel. The analysts also revised their Brent trading range to $65-$80 per barrel and adjusted the 2026 average price forecast to $68 for Brent and $64 for WTI.

Oil demand is now anticipated to grow at a slower rate than previously projected, while production from the Organization of the Petroleum Exporting Countries (OPEC) and its allies is expected to surpass earlier forecasts, further influencing market dynamics.

Additionally, concerns over the US economy persist as consumer sentiment dropped to its lowest level in nearly two and a half years in March. Inflation expectations have surged amid fears that tariffs could drive up prices and weaken economic growth.

As a result, the US Federal Reserve, set to meet next week, is expected to keep its benchmark interest rate within the 4.25 percent to 4.50 percent range. The central bank has already reduced rates by 100 basis points since September as it evaluates the economic impact of the Trump administration’s policies.