Houthis Fire First Missiles at Israel as WTI Consolidates Above $100

The Houthi Front Opens

The most significant overnight development: Houthi rebels in Yemen claimed their first military operation against Israel, launching what they described as "a batch of ballistic missiles" at "sensitive Israeli military targets." Israeli forces intercepted the projectile, but the symbolism matters more than the warhead.

The Houthis had stayed on the sideline for nearly a month while Iran, the US, and Israel traded strikes. Their entry into the conflict collapses the containment thesis that kept some risk premium in check — the war is no longer a bilateral exchange between state militaries, it's a regional proxy conflict with multiple active fronts.

This matters for oil because the Houthis sit on the Bab el-Mandeb Strait, the 16-mile-wide chokepoint at the southern entrance to the Red Sea. Saudi Aramco had been rerouting millions of barrels per day through its east-west pipeline to the Red Sea port of Yanbu — a workaround for Hormuz. If the Houthis start targeting that route, the last major alternative for Gulf oil exports is compromised.

Escalation on Every Axis

While the Houthis opened a new front, the existing ones intensified. Israel launched fresh strikes on Tehran early Saturday, with AFP journalists reporting around 10 intense blasts and black smoke visible from the capital. Iran reported an airstrike near its Bushehr Nuclear Power Plant — the third strike in ten days near the facility.

On the US side, ten American service members were injured in an Iranian missile and drone attack on Prince Sultan Air Base in Saudi Arabia, with two listed as very seriously hurt. One person was killed in Tel Aviv from Iranian strikes.

Diplomacy remains dead. Iran flatly rejected the US 15-point peace proposal, with Foreign Minister Araghchi declaring no negotiations are planned. Pakistan is hosting talks with Saudi, Turkish, and Egyptian foreign ministers, but without Iran at the table, the exercise is largely performative.

What Triple-Digit Oil Prices Mean From Here

WTI is now sustaining above $100 — a level it briefly touched at $100.04 on Friday before closing at $99.64. The current print of $100.1 marks the first sustained triple-digit WTI since July 2022, when Russia's invasion of Ukraine was the dominant energy shock.

The structural picture is severe. Daily transits through Hormuz have collapsed from 120 to roughly 4 vessels per day. An estimated 17.8 million barrels per day of oil and fuel flows remain disrupted. Cumulative losses since the conflict began on February 28 are approaching 500 million barrels.

Goldman Sachs raised its 2026 Brent forecast to $85 average from $77, with near-term expectations of $110 through March and April. Their risk scenario: if the disruption stretches to two months, Q4 Brent could reach $93. In an extreme tail scenario, Goldman warned prices could approach the 2008 peak of $147.25. The bank estimates a $14-18 per barrel geopolitical risk premium is currently embedded in prices.

The Trump administration extended its deadline for Iran to reopen the Strait to April 6. Shipping analysts assess routine Hormuz transit is unlikely to resume for the remainder of 2026. With Houthi involvement now threatening the Red Sea alternative, the global oil supply chain has run out of easy detours.

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