Investing.com– Oil prices rose Monday, buoyed by prospects of trade disruptions, after the U.S. vowed to continue strikes against Yemen’s Houthis until their attacks ceased.
At 10:10 ET (14:10 GMT), Brent Oil Futures expiring in May rose 0.9% to $71.24 per barrel, and West Texas Intermediate (WTI) crude futures jumped 0.9% to $67.54 per barrel.
US vows to keep striking Houthis until shipping attacks stop
The U.S. administration has intensified its military operations against Yemen’s Iran-backed Houthi rebels, with Defense Secretary Pete Hegseth announcing that airstrikes will continue indefinitely until the Houthis cease their attacks on U.S. ships and drones.
This escalation follows initial strikes that resulted in significant casualties among Houthi forces.
The Houthis have a history of targeting commercial vessels in the Red Sea, a crucial corridor for global commerce, accounting for about 15% of the world’s shipping traffic.
The heightened conflict has raised concerns over potential disruptions to vital shipping routes in the Red Sea, leading to a notable impact on global oil markets.
The ongoing hostilities could threaten the security of maritime trade in the region, thereby tightening oil supplies.
China announces special plan to boost consumption
China unveiled on Sunday a comprehensive plan aimed at boosting domestic consumption, signaling a strategic shift to make internal demand the primary engine of economic growth.
The plan outlines measures to increase residents’ income, reduce financial burdens, and enhance the consumption environment to stimulate spending.
Key initiatives include promoting reasonable wage growth, expanding property income channels, and exploring ways to unlock the value of rural housing through rental arrangements and cooperative models.
The plan also emphasizes the development and application of new technologies and products, such as autonomous driving and smart wearables, to create new high-growth consumption sectors.
The prospect of increased domestic consumption in the biggest oil importer China, particularly in sectors like automobiles and technology, suggests a potential rise in energy demand. This anticipated surge in consumption has contributed to a boost in oil prices.
Also helping the tone was the release of data showing China’s retail sales growth quickened, rising 4.0% in the January-February period, better than a 3.7% rise in December and marking the quickest rate since November 2024.
China’s industrial output rose 5.9% in the first two months of the year from a year earlier, slowing from a 6.2% expansion in December but beating market expectations.
Ukraine peace talks in focus
Traders are also keeping an eye on the prospect of peace in Ukraine, given this could result in Russian crude reentering the global market.
U.S. President Donald Trump said he plans to speak to Russian President Vladimir Putin on Tuesday to discuss how to end the Ukraine war.
Trump is trying to win Putin’s support for a 30-day ceasefire proposal that Ukraine accepted last week.
(Ayushman Ojha contributed to his article.)