Oil prices remained relatively stable on Monday following confirmation by Hezbollah that its leader was killed in an Israeli airstrike in Lebanon’s capital, Beirut, with global benchmark Brent crude rising by 1.56% to $73.10 a barrel, while U.S. West Texas Intermediate futures were 1.09% higher at $68.19 per barrel.
The Israel Defense Forces had reported the elimination of Hassan Nasrallah, who had led the Iran-backed Hezbollah for over three decades, in a targeted strike on the group’s headquarters in Beirut.
Experts noted that despite escalating tensions in the Middle East, there has been no disruption in oil supply. Andy Lipow, President at Lipow Oil Associates, highlighted the increased production from the U.S., Canada, and Guyana, along with stalling Chinese demand and OPEC+ holding off on production cuts restoration, as factors impacting the oil market.
While acknowledging the potential for crude oil prices to reach $100 per barrel in the event of a rapid escalation in conflict, experts pointed out the closure of the Straits of Hormuz as the biggest risk to the oil market, as it could lead to a $30 per barrel price jump.
The strait serves as a crucial channel for global oil production, connecting Middle Eastern oil producers to key markets worldwide.
Meanwhile, the recent evacuations of thousands of individuals on both sides of the Israel-Lebanon border due to cross-border fire following Hamas’s attack on Israel have heightened tensions in the region, with Hezbollah supporting the Palestinian militant group Hamas.
