Global Instability Drives Oil Price Surge Amid Yemen and Russia Tensions

Oil prices climbed by nearly 2% on Monday as a series of geopolitical flare-ups in the Middle East and Eastern Europe reignited fears of global supply disruptions. Brent crude futures rose $1 to settle at $61.64 a barrel, while U.S. West Texas Intermediate crude increased by $1.10 to reach $57.84. This upward trend marks a sharp reversal from last Friday’s 2% drop, which had been triggered by brief optimism regarding a potential peace deal in Ukraine. Market sentiment shifted rapidly following Saudi airstrikes against separatist forces in Yemen and sensational claims from Moscow regarding a drone attack on President Vladimir Putin’s residence, both of which have introduced fresh volatility into the energy sector.

In the Middle East, the Saudi-led coalition’s strikes against the Southern Transitional Council (STC) in Yemen have raised the specter of a broader regional conflict, potentially threatening key transit routes. Simultaneously, the Kremlin’s accusation that Ukraine launched 91 drones at a presidential residence in northern Russia has led Moscow to “review” its position in peace negotiations, despite Ukrainian denials and claims that the incident was staged to justify further aggression. These developments have overshadowed recent diplomatic progress between Presidents Trump and Zelensky, leaving investors wary of how these renewed hostilities will impact long-term output.

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Beyond geopolitical friction, oil markets are finding a “soft floor” near $60 a barrel due to robust crude imports from China and projections that non-OPEC+ supply growth may stall by mid-2026. However, the immediate direction of prices remains clouded by a delay in the U.S. government’s weekly stockpiles report, which was expected to show a decline in crude inventories.

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