Oil prices rose 1% after the United States vowed to continue military strikes against Yemen's Houthi rebels, targeting their attacks on shipping in the Red Sea. Brent crude rose to $71.30 a barrel, while West Texas Intermediate increased to $67.57 a barrel.
U.S. airstrikes on Houthi positions, which have reportedly killed at least 53 people, are the largest military operation in the Middle East under President Donald Trump. A U.S. official indicated that the campaign could last for weeks. The Houthi attacks have disrupted global shipping and led to costly U.S. operations to intercept missiles and drones.
Despite a recent slight recovery in oil prices, concerns about a global economic slowdown, fueled by escalating trade tensions, have weighed on the market. Analysts at Goldman Sachs reduced their oil price forecasts, citing slower U.S. economic growth due to tariffs on China, Mexico, and Canada. They now predict Brent crude to reach $71 per barrel by December 2025, down $5 from previous estimates.
Meanwhile, in China, efforts to stimulate the economy by boosting incomes and stabilizing key markets have lifted market sentiment. China’s policies to revive consumption and improve the real estate sector helped push oil prices higher.
The global oil market remains under pressure - crude has fallen by more than $10 a barrel from this year’s high in January - as tensions continue, including the ongoing U.S.-China trade war and concerns over OPEC+ production increases. Goldman Sachs sees potential for a modest recovery in the short term, but risks remain, particularly from further tariff escalations and OPEC+ decisions.