Oil prices experienced a significant jump on Monday, climbing 2% as Israel intensified its military operations in Lebanon. This escalation has rekindled concerns about the stability of a fragile ceasefire and its potential impact on global oil markets.
Brent crude futures, the international benchmark, saw a 2.43% increase, reaching $93.33 a barrel. West Texas Intermediate futures followed suit, gaining 2.76% to trade at $89.77 per barrel. These gains reflect the market's reaction to the expanding conflict, which follows recent U.S.-brokered talks aimed at de-escalating tensions between Israel and Hezbollah.
The expansion of hostilities, directly ordered by Prime Minister Benjamin Netanyahu despite an April ceasefire declaration, has cast a shadow over hopes for an extended ceasefire arrangement between Washington and Tehran. The situation introduces volatility into the energy sector, as potential supply disruptions become a more prominent concern.
The Sea Voyager crude oil tanker anchored off the Port of Long Beach in Long Beach, California, US, on Thursday, May 7, 2026.
Tim Rue | Bloomberg | Getty Images
"Together with Defense Minister Yisrael Katz, I instructed the IDF to expand the maneuver in Lebanon," Benjamin Netanyahu said Sunday. The order came despite a ceasefire declared in April.
Goldman Sachs noted that risks to its fourth-quarter 2026 Brent and WTI forecasts of $90 and $83 per barrel remain "two-sided." The investment bank cautioned that while persistent Middle East supply disruptions could drive prices upward, a weakening demand environment could introduce significant downside risks.
Goldman Sachs estimated that weak April oil retail sales data from China and Western Europe collectively indicated approximately 2 million barrels per day of downside risk to its already conservative demand forecasts.
