Oil Market Update: Price Escalation Driven by Geopolitical Tensions
Oil prices experienced an increase exceeding 1% at the week’s onset, responding to escalating tensions in the Middle East.
The uptick in prices follows a commitment from the United States to intensify military actions against the Houthi group in Yemen, particularly in response to their attacks on commercial vessels.
As of Monday, Brent crude oil surged by 72 cents, reaching $71.30 per barrel, marking its highest price point in recent times. Similarly, Texas light sweet crude also climbed by 72 cents, settling at $67.90 per barrel.
This military operation, which resulted in the deaths of at least 53 individuals, represents the most significant U.S. military engagement since the Trump administration commenced.
A U.S. official indicated that these military efforts are expected to extend over the upcoming weeks, further heightening concerns regarding potential disruptions to oil transport in the Red Sea region.
Last week, oil prices recorded a modest weekly increase, halting a month-long decline.
In light of these developments, analysts at Goldman Sachs have adjusted their oil price projections, citing concerns about a potential slowdown in the U.S. economy stemming from the trade tensions initiated during Donald Trump’s presidency.
Specifically, the firm’s forecasts for Brent crude oil prices in 2025 have been lowered by $5 to $71 per barrel, while Texas light crude oil is now estimated at approximately $6 lower than prior predictions.
