Yemen Monitor / Marib / Exclusive:
Global oil prices recorded a noticeable increase in Monday’s trading, driven by escalating military tensions in Yemen and fading hopes for reaching a peace agreement in Ukraine. This has raised investors’ fears of supply chain disruptions amid a tense geopolitical environment.
West Texas Intermediate (WTI) crude prices jumped by 2.5% to reach $58.17 per barrel, while February-delivery Brent crude rose by 2.24% to $62.00 per barrel. This surge comes as market focus shifts towards the Middle East, with indications of a new round of instability in Yemen emerging – as reported by Oil Price.
News agencies reported that the Saudi-led coalition vowed to respond to any military movements by the southern separatist factions (supported by the UAE). This follows the Southern Transitional Council’s incursion into the oil-rich Hadramawt Plateau region and its control over Hadramawt and Al-Mahrah on the Arabian Sea and Indian Ocean. This field tension has raised market concerns about the potential expansion of the conflict and its direct impact on the security of waterways and regional energy supplies.
Hopes for a near-term breakthrough in the Russian-Ukrainian crisis faded after talks described as difficult between Washington and Kyiv. Despite statements by US President Donald Trump and Ukrainian President Volodymyr Zelenskyy about “gradual progress,” core issues related to security guarantees and regional arrangements remain unresolved. This has prompted investors to price in an additional “risk premium” on crude prices.
Analysts believe that oil gains may remain limited in the long term due to concerns about the accumulation of global inventories during 2025. Forecasts point to strong production growth from countries outside “OPEC+,” against modest growth in global demand, particularly from China.
In this context, analysts at Standard Chartered have lowered their oil price forecasts for 2026 and 2027 by $15 per barrel, indicating that supply may exceed demand by up to two million barrels per day next year.
