The United States and Iran-backed Houthi rebels in Yemen are both vowing escalation after the U.S. launched airstrikes to deter the rebels from attacking military and commercial vessels on one of the world's busiest shipping corridors.

The U.S. carried out new airstrikes on Yemen, expanding the biggest U.S. military operation in the Middle East since President Trump took office.

President Trump says he has ordered a “decisive” military action against Houthi rebels in Yemen, opening a new salvo against the Iran-backed group that has targeted shipping lanes in the Red Sea.

Oil prices rose slightly on Monday after the United States vowed to keep attacking Yemen's Houthis until the Iran-aligned group ends its assaults on shipping, while Chinese economic data buoyed hopes for higher demand.

Oil futures climbed on Monday, finding support after the U.S. over the weekend launched U.S. strikes on Houthi rebels in Yemen, raising the risk of disruptions to oil flow in the region.

Oil prices were up nearly 1 per cent on Monday after the US bombed Yemen's Houthis for a second night, warning of an “unrelenting” attack on the militant group, and as China announced stimulus plans to boost its tepid economy.