WTI oil rallied as traders focused on the situation in Saudi Arabia. Iran-backed Houthis attacked Saudi airports over the weekend. Saudi Arabia said that the “cowardly terrorist attack”, which led to civilian deaths, was a war crime by the Houthis.

Oil traders bet that Saudi Arabia would be forced to respond, engaging in a full war against the Houthis. In turn, the Houthis could attack oil facilities in Saudi Arabia. The U.S. may choose to help Saudi Arabia in the war against the Houthis. Put simply, the risks of additional escalation in the region are rising on a daily basis.