Oil prices jumped on Monday, with Brent crude surpassing $81 per barrel and WTI nearing $77, fueled by a perfect storm of geopolitical risks.
The market’s bullish sentiment, already buoyed by hopes for an interest rate cut, found further momentum as conflict and supply threats rattled the global stage.
In a dramatic turn of events, Israel launched a large-scale airstrike against Hezbollah targets in southern Lebanon early Sunday, marking the most intense exchange between the two since their 34-day war in 2006.
Israel deployed 100 jets to strike 40 sites it identified as imminent threats, while Hezbollah responded with a barrage of over 340 rockets aimed at military targets in Israel and the Golan Heights. The escalating conflict casts a dark shadow over ceasefire negotiations currently underway in Egypt.
Meanwhile, Russia unleashed a coordinated missile and drone assault on Ukrainian cities overnight, targeting critical infrastructure. Ukrainian President Zelensky reported that Russia had launched over 100 missiles and nearly 100 drones, leading to widespread power outages and water supply disruptions across the country.
Adding to the turmoil, Libya’s Benghazi-based government declared a halt to all oil production and exports, citing force majeure. This government, though not internationally recognized, controls most of Libya’s oilfield businesses. The shutdown comes as tensions within the country reach a boiling point, with armed factions clashing over attempts to oust the head of Libya’s Central Bank.
These concurrent crises are stirring the pot in the oil markets, setting the stage for a volatile week ahead as the world watches these geopolitical flashpoints unfold. The ripple effects of these events are poised to keep oil prices on a rollercoaster ride, leaving the global energy market bracing for what’s next.
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