Oil prices surged as tensions in the Middle East escalated following an Israeli airstrike on Hezbollah targets in southern Lebanon. Global benchmark Brent crude rose above $79 per barrel, while the U.S. marker, West Texas Intermediate (WTI), climbed to nearly $75 per barrel.
On Sunday morning, Israel launched more than 100 warplanes to target thousands of Hezbollah missile launchers in southern Lebanon. In response, Hezbollah, an Iranian-backed militant group designated as a terrorist organization by the U.S., fired over 200 projectiles, which caused limited damage, according to Israeli officials.
Hezbollah stated that it had “concluded” its military operations for the day but warned that hostilities with Israel would continue until a cease-fire is agreed upon in Gaza.
Despite the escalating conflict, negotiations in Cairo aimed at establishing a pause in the fighting between Israel and the Palestinian militia Hamas proceeded as planned on Sunday. Israel also eased safety restrictions on its population Sunday night after earlier declaring a state of emergency and shutting down its main airport for several hours.
The rise in oil prices on Monday solidified oil’s return to gains for the year, driven by political risks and expectations of an imminent interest rate cut in the U.S. Federal Reserve Chair Jerome Powell hinted that the inflation-fighting measures may be nearing an end during his speech in Jackson Hole, Wyoming, on Friday, stating, “the time has come for policy to adjust.”
