Oil prices jump over 2% as Israel intensifies Lebanon offensive, raising supply fears – Firstpost

Global oil prices surged more than 2 per cent on Monday after Israel ordered troops to push deeper into Lebanon, raising fears of a wider regional conflict and potential disruptions to global energy supplies.

Brent crude futures rose $1.93, or 2.12 per cent, to $93.05 a barrel, while US West Texas Intermediate (WTI) crude gained $2.17, or 2.48 per cent, to $89.53 a barrel in early trading.

The latest gains came as tensions escalated between Israel and the Iran-backed Hezbollah militant group despite a ceasefire announced more than six weeks ago. The renewed fighting has dampened hopes that the United States and Iran could soon agree to extend a separate ceasefire arrangement that had previously eased concerns over supply disruptions.

The Israel-Lebanon conflict has emerged as the most significant spillover from the broader Iran war. Hezbollah began launching rockets and drones into northern Israel in March in support of Iran, triggering months of cross-border hostilities. Although both sides agreed to a ceasefire in mid-April, sporadic exchanges of fire have continued.

Adding to market anxiety are growing concerns over the Strait of Hormuz, a critical maritime chokepoint through which nearly one-fifth of the world’s oil and gas supplies pass. Analysts warn that the presence of naval mines and ongoing security risks could delay the reopening of the strategic waterway, keeping energy markets on edge.

“Even if an agreement is reached, it won’t deliver a flood of supply,” analysts noted, highlighting lingering uncertainty over Middle East energy flows.

The supply concerns overshadowed disappointing economic data from China, the world’s second-largest economy. Factory activity remained weak, reinforcing concerns about slowing growth, weaker exports and persistent price pressures.

Despite signs of softer demand from China, traders remained focused on geopolitical risks, which continue to be the dominant driver of oil prices.

Market participants are now closely watching developments in the Middle East, particularly any progress in ceasefire negotiations involving Iran, Israel and Hezbollah, as well as the security situation around the Strait of Hormuz.