Oil prices jumped more than $2 a barrel on Monday after Israel carried out fresh strikes on Lebanon on Sunday, despite an existing ceasefire between the two countries. The renewed escalation dashed hopes for an end to the broader regional conflict and raised concerns about the resumption of crude shipments through the Strait of Hormuz.
Crude oil price on June 8
U.S. crude futures rose $2.10, or 2.32%, to $92.64 a barrel, while Brent crude gained $2.33, or 2.5%, to $95.42 a barrel.
The latest attacks are seen as another obstacle to a potential U.S.-Iran peace agreement and the reopening of the Strait of Hormuz, a vital route for global oil and gas supplies. Iran has maintained that a ceasefire involving Lebanon is a prerequisite for any peace deal with Washington.
Tehran responded to the strikes in Beirut, targeting its ally Hezbollah, by firing missiles at Israel. U.S. President Donald Trump said he would urge Israeli Prime Minister Benjamin Netanyahu not to launch a retaliatory response against Iran.
Israel entered Lebanon in March after Iran-backed Hezbollah launched rockets and drones across the border. Following negotiations in Washington, Israel and Lebanon announced a ceasefire on June 3. The two sides had earlier agreed to halt hostilities in April, though clashes continued despite the agreement.
The broader conflict has largely remained paused since the U.S. and Israel suspended attacks on Iran in early April. However, Tehran has continued to restrict most shipping activity through the Strait of Hormuz.
Against this backdrop of supply disruptions, OPEC+ on Sunday approved its fourth oil output increase in four months. Analysts, however, said the move is unlikely to significantly ease market concerns, as many OPEC+ producers remain unable to meet production targets due to the Hormuz disruption.
Haitong Futures said crude prices could move toward the upper end of their trading range as tighter supply-demand dynamics coincide with rapidly declining global oil inventories.
Analysts added that even if a ceasefire is secured, shipping through the Strait of Hormuz may take months to normalize. Any damage to energy infrastructure could further slow the recovery process.
Last month, Saudi Aramco Chief Executive Officer Amin Nasser cautioned that disruptions in the Strait of Hormuz could postpone stability in global oil markets until 2027. He said prolonged disruptions could affect nearly 100 million barrels of oil supply every week. Saudi Aramco remains the world's largest oil producer.
Morgan Stanley described the oil market as being in "a race against time", warning that the factors which have so far limited a sharper rise in crude prices may begin to fade if the Strait of Hormuz remains closed through June.
The brokerage noted that stronger U.S. crude exports and weaker demand from China have helped absorb part of the supply shock. However, it warned that a prolonged closure of the key shipping route could tighten global supplies once again, particularly if the disruption outlasts the period during which the U.S. and China can offset the impact.
