Key Points
- Oil prices rose more than 3 per cent as Brent and WTI futures reacted to renewed Israeli strikes on Lebanon
- Markets were also driven by spillover risks from the ongoing Iran-Israel war, which has intensified regional instability since early 2026
- Traders monitor threats to key energy routes including the Strait of Hormuz
ISLAMABAD: Oil prices climbed sharply on Monday, rising more than 3 per cent, after Israel strikes on Lebanon and exchanges of attacks with Iran reignited fears of a greater regional war.
Investors rushed to factor in the continuing Iran-Israel conflict that has repeatedly shaken global energy markets since early 2026.
Brent crude futures gained about 3.3 per cent to hover near 96 dollars per barrel, while West Texas Intermediate rose roughly 3.1 per cent to around 93 dollars per barrel.
The rally instantly recovered previous session losses and extended a pattern of sharp volatility that has defined oil trading since the escalation of hostilities across the Middle East.
The latest price surge came after renewed Israeli military action in Lebanon, which analysts said added a fresh layer of risk to an already fragile regional security environment.
At the same time, traders continued to monitor developments in the Iran-Israel war, where the two have exchanged strikes for the first time after the April ceasefire.
The Iran-Israel clashes have repeatedly triggered supply fears since it escalated into direct military exchanges in 2026.
The broader conflict has already reshaped global energy dynamics.
The Iran-Israel war, which intensified after cross-border strikes and retaliatory missile attacks earlier in 2026, has disrupted expectations of stable oil flows from the Middle East.
Markets have since remained highly sensitive to any escalation involving Iran, Israel, Lebanon and allied groups across the region.
A key concern for investors is the Strait of Hormuz, through which a significant share of the world’s seaborne oil trade passes.
Any threat to navigation in this corridor has previously triggered sharp spikes in crude prices. The analysts warned that sustained instability could push markets into deeper supply risk.
The conflict’s overall impact has also been reflected in repeated bouts of market volatility, as oil prices have surged on escalation and eased temporarily on diplomatic signals.
The latest increase underscores how closely energy markets remain tied to developments in the Iran-Israel confrontation and its regional spillovers.
