Oil Prices Jump on Houthi Attacks, U.S.-Iran Escalation Fears

Oil prices surged Monday as geopolitical tensions flared in the Middle East. Brent crude jumped 3.4% to $106.60 a barrel, while West Texas Intermediate gained 2.7% to $94.61 a barrel.

Saudi Arabia reported intercepting six ballistic missiles targeting the kingdom, reigniting supply disruption fears in a region that accounts for roughly one-third of global oil production. The attacks coincided with stalled U.S.-Iran negotiations, adding a second layer of risk premium to the session.

The price action marks a sharp reversal from last week's softness, when demand concerns weighed on crude. Energy traders are now pricing in heightened tail risk that direct conflict could threaten key production infrastructure or shipping lanes through the Strait of Hormuz, through which approximately 21 million barrels per day transit.

Volatility characterized the session as prices whipsawed on conflicting headlines about diplomatic progress and military escalation. The moves extended beyond the oil complex, with defense equities gaining and safe-haven flows supporting gold.