Panoramic view of towers and oil platforms of Venezuela's state oil company, Petroleos de Venezuela SA.
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Oil prices did not react sharply on Monday after Hezbollah confirmed its leader was killed in an Israeli airstrike on the Lebanese capital Beirut on Friday.
Over the weekend, the Israel Defense Forces reported that Hassan Nasrallah, who led the Iran-backed militant group Hezbollah for more than three decades, was killed in a “targeted attack” on the group's Beirut headquarters on Friday.
According to reports, Hezbollah is listed as a terrorist organization by many countries including the United States and Britain and is known for its violent opposition to Israel and resistance to Western influence in the Middle East. Director of National Intelligence and london parliament.
The incident comes after months of conflict and has raised concerns about a wider conflict involving Iran. The IDF describes Nasrallah as the organization's “central decision-maker” and “strategic leader.”
But the oil market hasn't surged higher. Global benchmark Brent crude futures rose 1.56% to $73.10 a barrel, while U.S. West Texas Intermediate crude futures rose 1.09% to $68.19 a barrel.
Andy Lipow, president of Lipow Oil Associates, said that while hostilities have intensified across the Middle East, there have not been any disruptions to oil supplies.
“Oil markets don't expect an all-out war between Iran and Israel to impact supply,” he told CNBC via email.
Disruption to oil markets has been limited since the conflict between Hamas and Israel erupted last year. Lipow explained that the oil market remains under pressure due to rising production from the United States, Canada and Guyana, coupled with stagnant demand from China, and OPEC+ delaying the resumption of production cuts.
Josh Young said: “The elimination of Hezbollah leadership may trigger a reaction that affects oil supplies, but since it has no direct impact on (oil supplies)…the oil market may not digest much additional oil at the moment. risk.
However, both experts noted that a rapid escalation of the conflict could lead to crude prices hitting $100 a barrel.
Lipow said the biggest risk facing the oil market is the closure of the Strait of Hormuz. He added that although unlikely, if it happened, oil prices would rise by $30 per barrel.
“If things deteriorate quickly, any major disruption to Iranian oil supplies or oil exports through the Strait of Hormuz could push oil prices well above $100 a barrel,” Yang said.
The strait between Oman and Iran is an important passage One-fifth of global oil production daily flows, according to the U.S. Energy Information Administration. It is a strategically important waterway connecting Middle Eastern crude oil producers to major markets around the world.
In the months after Hamas attacked Israel on October 7, tens of thousands of people on both sides of the Israeli-Lebanese border were forced to evacuate their homes due to cross-border fires, and Hezbollah also expressed support for Hamas, a Palestinian militant group.