Oil prices opened about 1% higher on Monday as the U.S. pledged to continue strikes on Yemen’s Houthis until the Iran-backed group halts attacks on shipping.
By 0015 GMT, Brent crude futures were up 72 cents (1.02%) at $71.30 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 72 cents (1.1%) to $67.90 per barrel.
The U.S. airstrikes, which the Houthi-run health ministry reported killed at least 53 people, mark the largest U.S. military operation in the Middle East since President Donald Trump took office in January. A U.S. official told Reuters the campaign could last for weeks.
Houthi attacks on Red Sea shipping have disrupted global trade and forced the U.S. military into an expensive campaign to intercept missiles and drones.
Oil prices edged higher last week, breaking a three-week losing streak fueled by concerns over a global economic slowdown amid escalating U.S. trade tensions.
Goldman Sachs analysts lowered their oil price forecasts, citing expectations of slower U.S. economic growth due to tariffs imposed by the Trump administration on China, Mexico, and Canada.
Goldman Sachs analysts lowered their December 2025 oil price forecast, cutting Brent by $5 to $71 per barrel and WTI to $67. They also revised their Brent price range to $65-$80 and reduced their 2026 average forecast to $68 for Brent and $64 for WTI, according to a note.
The analysts cited slower-than-expected oil demand growth and higher-than-anticipated supply from OPEC+ as key factors behind the revision.
U.S. consumer sentiment fell to its lowest level in nearly two and a half years in March, while inflation expectations surged amid concerns that Trump’s broad tariffs could drive up prices and weaken the economy.
With Federal Reserve officials set to meet next week, they are expected to keep the benchmark overnight interest rate at 4.25%-4.50%. The Fed has already cut rates by 100 basis points since September as it evaluates the economic impact of the Trump administration’s policies.
