Oil surges 3% as Iran war escalates with Yemen’s Houthis entering the Mideast conflict

Smoke emanates from smokestacks from an oil refinery in Linden, New Jersey, on March 18, 2026.

Kena Betancur | AFP | Getty Images

Oil prices climbed Monday after Yemen’s Houthis said they had fired missiles at Israel, opening a new front in the U.S.-Israeli war with Iran.

May futures for international benchmark Brent crude rose 2.92% to $115.86 per barrel during early Asia hours, while U.S. West Texas Intermediate futures were 3.20% higher at $102.80 per barrel.

Yemen’s Houthis said Saturday they had launched missiles at Israel, marking their first direct involvement in the U.S.- Israel war against Iran.

In a post on X, spokesperson Yahya Saree said the group fired a barrage of ballistic missiles at what it called sensitive Israeli military targets, in support of Iran and Hezbollah forces in Lebanon.

The attack marks a further escalation in the conflict, which began with U.S. and Israeli strikes on Iran on Feb. 28.

Ed Yardeni, president of Yardeni Research, said global equities were beginning to reflect a scenario of “higher-for-longer” oil prices and interest rates, as the risk of a prolonged conflict grows.

He warned that the continued blockade of the Strait of Hormuz could deepen the market pullback and raise recession risks, with uncertainty around the conflict, including the possibility of greater U.S. involvement, likely to keep volatility elevated until oil flows normalize.

“The speed and magnitude of the move underscore how quickly energy markets are repricing geopolitical risk, challenging earlier efforts to keep both oil and bond markets anchored, and reinforcing the risk of sustained disruption in the Strait,” Yardeni wrote in a note published Monday.

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