Oil prices jumped sharply on Monday, with Brent crude heading for its steepest monthly rise ever, after Yemeni Houthis launched attacks on Israel over the weekend, expanding the conflict that began with U.S. and Israeli strikes on Iran in late February. Brent futures rose $2.43, or 2.16%, to $115 a barrel, following a 4.2% gain on Friday, while U.S. West Texas Intermediate crude increased $1.86, or 1.87%, to $101.50 a barrel. According to Reuters, Brent has soared 59% this month, surpassing monthly gains seen during the 1990 Gulf War, as the Iran conflict effectively closed the Strait of Hormuz, a crucial artery for a fifth of the world’s oil and gas supplies.
The conflict’s expansion into Yemen has amplified fears about shipping lanes in the Red Sea and around the Bab el-Mandeb, threatening global oil flows. Analysts at JP Morgan, led by Natasha Kaneva, noted that the war is no longer confined to the Persian Gulf, with escalating attacks disrupting vital ports such as Saudi Arabia’s Yanbu and Oman’s Salalah terminal. Saudi crude exports are being redirected to Yanbu, reaching 4.658 million barrels per day, but any further disruption could force Saudi Arabia to pivot to the Suez-Mediterranean pipeline.
Market observers point to mounting uncertainty over the conflict’s trajectory. Vandana Hari, founder of Vanda Insights, told Reuters that markets have largely discounted the possibility of a negotiated settlement, instead bracing for further escalation. U.S. President Donald Trump has asserted that the United States and Iran have engaged in “direct and indirect” talks, while Israeli forces continue to target Iranian infrastructure throughout Tehran. Iran, in turn, warned of potential retaliation to any U.S. ground assault even as it expressed willingness to negotiate.
The geopolitical fallout has triggered a global oil price rally, highlighting the vulnerability of energy markets to Middle East instability. With the conflict now spanning multiple regions, including the Persian Gulf, the Red Sea, and the Bab el-Mandeb strait, analysts warn that prolonged disruptions could further strain crude and refined product flows worldwide, putting added pressure on global energy security.
