Oil prices surged at the start of the week after Israel carried out fresh airstrikes on targets in Lebanon, which undermined a recent truce and heightened concerns about the prospects for wider regional conflict and the continued disruption of crude exports through the Strait of Hormuz.
As of 9:46 AM (Bangkok time) on Monday, Brent crude increased by $3.42, or 3.67%, reaching $96.51 per barrel, while U.S. crude futures advanced $3.35, or 3.70%, to $93.89 per barrel, reversing losses in both benchmarks on Friday.
Iran retaliated by launching missiles at Israel following Israeli strikes on Hezbollah in Beirut, while it insisted that a ceasefire with Lebanon is a prerequisite for any peace deal with Washington. U.S. President Donald Trump, on the other hand, stated he would tell Israeli Prime Minister Benjamin Netanyahu not to retaliate further.
The conflict intensified in March when Israel invaded Lebanon in response to Hezbollah’s missile and drone attacks across the border. After negotiations in Washington, Lebanon and Israel declared a ceasefire on June 3, but violence has continued despite a prior attempt at a cessation of hostilities in April.
While major combat has paused since the U.S. and Israel ceased strikes on Iran in early April, Iranian restrictions on shipping through the Strait of Hormuz remain in place, exacerbating supply shortages.
In response to the ongoing supply disruption, OPEC+ announced on Sunday a fourth oil production increase within four months, raising targets by 188,000 barrels per day starting in July.
However, analysts note that the impact of these increases will be minimal, as many OPEC+ members are unable to meet higher production quotas due to the continued closure of the strait and, for Russia, ongoing infrastructure challenges stemming from attacks on its oil facilities.
