Oil prices continued to rise on Monday, with Brent on track for a historic monthly increase, following the Yemeni Houthis’ initial attacks on Israel over the weekend, thereby escalating the U.S.-Israel conflict with Iran in the Middle East. Brent crude futures experienced an increase of $3.09, representing a 2.74% rise, reaching $115.66 a barrel by 2353, following a 4.2% gain on Friday. U.S. West Texas Intermediate was at $102.56 a barrel, up $2.92, or 2.93%, following a 5.5% gain in the previous session. Brent has surged 59% this month, marking the most significant monthly increase, surpassing the gains observed during the Gulf War of 1990, following the Iran conflict which has effectively shut down the Strait of Hormuz, a vital passage for approximately one-fifth of global oil and gas supplies.

The conflict, initiated on February 28 through U.S. and Israeli military actions against Iran, has escalated throughout the Middle East. Notably, Yemen’s Iran-aligned Houthis conducted their inaugural assaults on Israel since the onset of hostilities, heightening apprehensions regarding the security of shipping routes in the Arabian Peninsula and the Red Sea. The conflict has shifted from being primarily focused in the Persian Gulf and the Strait of Hormuz to now encompassing the Red Sea and the Bab el-Mandeb, which is recognized as one of the most critical chokepoints for the transportation of crude and refined products, according to a note from analysts.

Last week, Saudi crude exports that were re-routed from the Strait of Hormuz to the Yanbu port in the Red Sea amounted to 4.658 million barrels per day, according to data. According to analysts, should there be a disruption in exports from Yanbu, Saudi oil would have to redirect towards Egypt’s Suez-Mediterranean pipeline to reach the Mediterranean. Over the weekend, there was a notable escalation in attacks within the region, resulting in damage to Oman’s Salalah terminal, even as efforts to initiate ceasefire discussions were underway.

Iran announced its preparedness to counter a potential U.S. ground attack, alleging that Washington was gearing up for a land offensive while simultaneously pursuing negotiations. Pakistan’s Foreign Minister Ishaq Dar indicated that discussions had taken place regarding various strategies to achieve an early and lasting resolution to the conflict in the region, alongside the prospect of U.S.-Iran dialogues in Islamabad.