Global oil prices surged during Monday morning trading following news\nof recent Israeli attacks on Lebanon, which caught markets by surprise.\nThis new escalation has triggered fears that the Middle East conflict\ncould expand, potentially obstructing the reopening of the Strait of\nHormuz, the world\u2019s most vital energy shipping lane.<\/p>\n
According to Refinitiv data, Brent crude rose to US$95.29 per barrel,\na 2.36% jump from Friday\u2019s close of US$93.09. Similarly, West Texas\nIntermediate (WTI) climbed 2.18% to US$92.51 per barrel from its\nprevious position of US$90.54. This surge has erased much of the losses\nseen late last week when markets were optimistic about easing tensions\nbetween the United States and Iran.<\/p>\n
The primary driver of this sentiment is the Israeli airstrikes on\nBeirut on Sunday local time. This military action occurred just days\nafter Israel and Lebanon announced a ceasefire agreement on 3 June,\nfollowing negotiations in Washington. The situation intensified after\nIran responded to attacks on its ally, Hezbollah, by launching missiles\ninto Israeli territory. This new chain of conflict casts doubt on the\npossibility of immediate peace negotiations between Washington and\nTehran.<\/p>\n
For energy markets, the most critical issue is not merely the\nmilitary conflict, but the fate of the Strait of Hormuz. Iran has been\nobstructing much of the shipping traffic through the strait since the\nUS-Iran war broke out in February. Consequently, global oil supplies\nhave been disrupted, leaving many producing nations struggling to\ndeliver oil to consumers. As the primary transit route for oil and gas\nexports from the Gulf region, any disruption to the Strait of Hormuz\ndirectly impacts the global supply balance.<\/p>\n
Amidst these conditions, OPEC+ decided on Sunday to continue\nincreasing production for the fourth consecutive month. Seven core\nmembers of the group are expected to raise production targets by\napproximately 188,000 barrels per day in July. However, this decision\nhas failed to calm the markets, as the primary concern is not production\ntargets, but the actual ability of producing nations to deliver oil to\ninternational markets.<\/p>\n
OPEC data shows that the group\u2019s production has actually plummeted\nsince the conflict erupted. Average production fell to 33.19 million\nbarrels per day in April from 42.77 million barrels per day in February.\nGulf nations, including Saudi Arabia, face significant hurdles in\nmeeting customer demand due to disrupted export routes. Russia is also\nfacing its own pressures after attacks on its energy infrastructure\nreduced production capacity.<\/p>\n
These conditions have led the market to largely ignore the additional\nOPEC+ production quotas. As long as the Strait of Hormuz does not return\nto normal operations and geopolitical tensions continue to rise, the\nrisk of supply shortages continues to loom over the global oil market.\nThis has driven prices back towards their highest levels in over three\nmonths, despite OPEC+\u2019s ongoing efforts to increase market supply.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/israel-attacks-lebanon-oil-prices-surge-1780891045", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }