Oil rises as geopolitical tensions rise

Oil rose as U.S. strikes on Houthis stoked tensions Oil rose after the U.S. vowed more strikes on Iranian forces and proxies and after the Houthis vowed to retaliate for weekend bombings. Brent crude fell 7.4% last week, its biggest weekly drop since October, before rising as much as 1.2% to trade near $78 a barrel. U.S. crude was below $73. U.S. forces launched strikes against the Houthis over the weekend and have previously hit Iranian troops and militias in Syria and Iraq. The weekend bombings marked the Houthis’ biggest target since the first operation on Jan. 11 as part of an effort to end attacks on commercial shipping in the Red Sea. Despite warnings of more attacks, senior U.S. officials said the country would not be dragged into a protracted regional conflict. A stronger dollar also makes oil more expensive for many investors. Crude oil fell last week, wiping out almost all of this year’s gains amid talks to end the four-month-old Israel-Hamas conflict, although U.S. National Security Adviser Jake Sullivan said on Sunday that a deal was not imminent. There were also signs of strong supply as OPEC output remained above its collective limit and the U.S. produced record amounts. “Given that U.S. military strikes have refrained from directly attacking Iran, we think the Israel-Hamas ceasefire talks will be the more dominant influence,” said Vivek Dhar, an analyst at Commonwealth Bank of Australia. “This will keep Brent futures below $80 a barrel as markets pay closer attention to the risks of oversupply in the coming quarters.”