Oil prices climbed sharply on Monday after Yemen’s Houthi movement carried out attacks against Israel over the weekend, raising concerns that the conflict in the Middle East could widen further.
Ongoing clashes involving the U.S., Israel and Iran also suggested little sign of easing tensions. Tehran said it was prepared for a potential U.S. ground invasion as Washington increased its troop presence in the region.
Markets largely shrugged off remarks from U.S. President Donald Trump that struck an optimistic tone about negotiations with Iran.
By 00:43 ET (04:43 GMT), Brent crude futures had risen 2.7% to $115.55 a barrel, while West Texas Intermediate futures gained 1.8% to $101.41 a barrel. Earlier in the session, Brent had briefly surged to $116.43 a barrel.
Houthi attacks raise risk of new front in Iran war
The Iran-aligned Houthi group based in Yemen said on Sunday that it had fired multiple missiles at Israel and warned that further strikes could follow.
Their entry into the conflict fueled fears of a broader escalation, as the Houthis possess the capability to target vessels traveling through the Red Sea.
“The Houthis’ weekend involvement and the arrival of additional US troops underscore the conflict’s widening scope,” analysts at OCBC wrote in a note.
“With little prospect of an imminent reopening of the Strait of Hormuz, our baseline remains for Brent to stay around USD100/bbl through mid‐year before gradually easing in 2H26.”
Israeli forces said they had conducted strikes on targets across Iran’s capital over the weekend, while the United States announced the deployment of 3,500 troops to the Middle East aboard the USS Tripoli warship.
Oil prices had already posted strong gains in March, with Brent rising nearly 60% since the start of the U.S.-Israel war with Iran, which has severely disrupted global supply flows.
Iran has effectively shut down the Strait of Hormuz, a vital maritime route responsible for roughly 20% of global oil consumption.
Trump says Iran talks going well, says ceasefire could be soon
Oil markets continued to rise even after Trump said late Sunday that discussions with Iran were ongoing and that a deal could be near.
“I think we’ll make a deal with them, but it’s possible we won’t… I do see a deal with Iran, could be soon,” Trump told reporters aboard Air Force One.
The president did not provide a specific timeline for a possible agreement, though he described Iran’s new leadership as “very reasonable.”
Trump also claimed that Iran had allowed 20 oil tankers to pass through the Strait of Hormuz as a concession to the United States. Reports over the weekend indicated that 20 Pakistan-flagged oil tankers had been permitted to transit the strait.
Pakistan has said it is willing to host talks between Washington and Tehran after the U.S. proposed a ceasefire and called for negotiations.
However, Iranian authorities have largely rejected the idea of direct discussions with the United States and accused Washington over the weekend of secretly planning a ground invasion.
Separately, Trump told the Financial Times that he was open to taking control of Iran’s oil resources, while a report from the Wall Street Journal said the U.S. was considering seizing Iranian uranium. Both scenarios could involve U.S. forces entering Iran and would represent a significant escalation in the conflict.