Global oil prices rose more than two percent in early trading on Monday as renewed tensions between Israel and Hezbollah increased concerns over energy supply disruptions across the Middle East.
U.S. crude futures rose by US$2.37, or 2.71 percent, to US$89.73 per barrel by 0028 GMT, while Brent crude futures increased by US$2.16, or 2.37 percent, to US$93.28 per barrel.
Market sentiment shifted after Israel reportedly ordered troops to advance further into Lebanon amid renewed clashes with the Iranian-backed Hezbollah group, despite a ceasefire announced more than six weeks ago.
The escalation has weakened expectations of an early extension to the ceasefire discussions involving the United States and Iran, which had previously supported lower oil prices.
The Israel-Lebanon confrontation has emerged as one of the largest regional spillovers from the broader Iran conflict, with hostilities continuing despite a ceasefire reached in mid-April.
Meanwhile, uncertainty remains over the future of the Strait of Hormuz, a strategic shipping route that carries nearly one-fifth of global oil and gas supplies.
Analysts have warned that concerns over reported mine activity in the strait could delay efforts to fully reopen the waterway and prolong supply disruptions.
“Even if an agreement is reached, it may not immediately result in a large increase in supply,” market analysts noted.
Concerns over energy supply outweighed weaker-than-expected economic data from China, where slowing factory activity raised concerns about reduced demand from the world’s second-largest economy.
The latest price increases reflect continuing uncertainty over geopolitical tensions, supply security, and the outlook for global energy markets.
