On July 28, 2024, Israel launched an air strike on the southern Lebanese border village of Chihine, sending thick smoke billowing into the air.
Kavanagh Tharju | AFP | Getty Images
U.S. crude oil futures fell 2% on Monday as traders appeared unconcerned about the risk of an expanding war between Israel and the Iran-backed militia Hezbollah.
A rocket fired from Lebanon killed 12 children in the Israeli-occupied Golan Heights on Saturday. Israel blamed Hezbollah for the attack. The militia denied responsibility.
Israel's security cabinet has given Prime Minister Benjamin Netanyahu's government the authority to decide how and when to respond to rocket attacks.
Here are today’s energy prices:
- West Texas Intermediate Oil September contract: US$75.63 per barrel, down US$1.53, or 1.98%. U.S. oil prices have risen 5.7% so far this year.
- Brent September contract: US$79.65 per barrel, down US$1.54, or 1.82%. Year to date, the global benchmark is ahead by 3.4%.
- RBOB gasoline August contract: $2.42 per gallon, down 3 cents, or 1.39%. So far this year, gasoline prices are up 15.3%.
- natural gas August contract: $1.96 per thousand cubic feet, down 4 cents, or 2%. Natural gas prices are down 21.88% so far this year.
Tensions in the Middle East pushed up oil prices this spring when Israel and Iran came close to going to war, but since then the market has been muted in reaction to events in the region as there have been no actual disruptions to oil supplies.
Helima Croft, global head of commodity strategy at RBC Capital Markets, said: “The fighting between Iran and Israel in April failed to spark a wider conflict or put energy supplies at significant risk, and oil Markets have largely downplayed the Middle East war story.
However, Croft warned that a direct confrontation between Israel and Hezbollah could be the catalyst for OPEC member Iran to become involved in the war, as the militias are vital to Tehran's regional interests.
“Israel may indeed exercise restraint, as it did in April, and opt for more measured retaliation that would appear severe but would not open another front,” Croft wrote.
But analysts warned that almost daily cross-border attacks and the number of people displaced within Israel “seem to be a clearer indication that the conflict will become more serious, or at least that there is an increased risk of escalation due to miscalculation”.