Oil Prices Surge Amid U.S. Military Operations in Yemen
Oil prices experienced an uptick on Monday after the United States reaffirmed its commitment to conduct operations against the Houthis in Yemen. This strategy aims to curb the group’s attacks on maritime trade routes.
Brent crude futures increased by 41 cents, or 0.6%, reaching $70.99 per barrel by 03:36 GMT. Similarly, U.S. West Texas Intermediate crude futures rose by 40 cents, also a 0.6% gain, to settle at $67.58 per barrel.
The airstrikes conducted by the U.S. military, which the Houthi-controlled Ministry of Health reported resulted in at least 53 fatalities, mark the largest American military engagement in the Middle East since President Donald Trump took office in January 2017.
Reports indicate that Houthi assaults on shipping in the Red Sea have significantly disrupted global trade, prompting the U.S. military to initiate an expensive campaign aimed at intercepting missiles and drones targeting commercial vessels.
Oil prices had shown slight improvement in the previous week, breaking a three-week streak of losses that stemmed from concerns regarding a global economic slowdown driven by escalating trade tensions between the United States and other nations.
China has revealed mixed economic signals for the new year. Recent government data indicates a slowdown in industrial production for January and February, contrasted by a rapid acceleration in retail sales growth. Responding to these economic challenges, the Chinese government announced a "special action plan" aimed at boosting domestic consumption and fostering economic recovery amidst ongoing U.S. trade tariffs.
Analysts at Goldman Sachs have revised their outlook for oil prices downward, predicting slower U.S. economic growth than previously expected, influenced by tariffs levied against key trading partners, including Canada, China, and Mexico.
In their assessment, the analysts lowered their December 2025 price forecast for Brent crude by $5, now projecting it at $71 per barrel, with West Texas Intermediate expected at $67. They also provided a price range for Brent crude, estimating it will fluctuate between $65 and $80. For 2026, the medium forecasts have been adjusted to $68 for Brent crude and $64 for West Texas Intermediate.
Price Forecast Summary:
| Crude Type | December 2025 Estimate | 2026 Medium Forecast |
|---|---|---|
| Brent Crude | $71 | $68 |
| West Texas Intermediate | $67 | $64 |
| Price Range for Brent Crude | $65 – $80 |
The shifting dynamics in both geopolitical events and economic indicators suggest a cautiously optimistic outlook for the oil market, though ongoing developments will be critical in shaping future price trajectories.
