Oil prices opened about 1% higher on Monday after the United States vowed to keep attacking Yemen’s Houthis until the Iran-aligned group ends its assaults on shipping.
Brent futures rose 72 cents or 1.02%, to $71.30 a barrel by 0015 GMT, while U.S. West Texas Intermediate crude futures also rose 72 cents, or 1.1%, to $67.90 a barrel.
The U.S. airstrikes, which the Houthi-run health ministry said killed at least 53 people, are the biggest U.S. military operation in the Middle East since President Donald Trump took office in January. One U.S. official told Reuters the campaign might continue for weeks.
The Houthi attacks on shipping in the Red Sea have disrupted global commerce and set the U.S. military off on a costly campaign to intercept missiles and drones.
Oil prices rose slightly last week, snapping a three-week losing streak caused by concerns over a global economic slowdown driven by escalating trade tensions between the U.S. and other nations.
Analysts at Goldman Sachs cut oil price forecasts, saying they expected the U.S. economy to grow slower than previously anticipated due to tariffs imposed by the Trump administration on countries including China, Mexico and Canada.
“We reduce by $5 our December 2025 forecast for Brent to $71/bbl (WTI to $67), our Brent range to $65-80, and our 2026 average forecast to $68 for Brent (WTI to $64),” the analysts said in a note.
Oil demand was expected to grow at a slower pace than previously expected, while supply from the Organization of Petroleum Exporting Countries and its allies (OPEC+) was seen being higher than forecast, the Goldman analysts said.
U.S. consumer sentiment plunged to a nearly 2-1/2-year low in March and inflation expectations have soared amid worries that Trump’s sweeping tariffs would boost prices and undercut the economy.
U.S. Federal Reserve officials meeting next week are expected to leave the benchmark overnight interest rate in the 4.25%-4.50% range, having reduced it by 100 basis points since September, as they continue to assess the economic impact of the Trump administration’s policies.
(Reporting by Sudarshan Varadhan; Editing by Diane Craft and Jamie Freed)