Oil prices rally as Saudis begin air strikes in Yemen

Oil prices rallied for a second straight day yesterday after Saudi Arabia and its Gulf Arab allies began air strikes in Yemen, sparking fears of a bigger Middle East battle that could disrupt world crude supplies.

The military operation against Houthi rebels, who have driven the president from Yemen’s capital Sanaa, has not affected oil facilities of major Gulf producers, but fears the conflict could spread has stoked concerns about Middle East oil shipments.

Iran, which backs the Houthi rebels, denounced the air strikes. Russian president Vladimir Putin, in a phone conversation with his Iranian counterpart, called for an “immediate ceasefire”. Pakistan, a Riyadh ally far away from the conflict, promised a “strong response” to any threat to Saudi integrity.