Oil Prices Surge as Israel Escalates Lebanon Conflict

Jakarta, CNBC Indonesia – According to Refinitiv data as of 7:45 am WIB on Monday, June 1, 2026, global crude oil prices recorded a significant rise. Brent crude oil prices surged to $93.15 per barrel, marking a sharp increase after a 10% decline the previous week. Meanwhile, West Texas Intermediate (WTI) futures rose substantially to $89.62 per barrel. This over 2% surge in energy prices was triggered by renewed geopolitical tensions in the Middle East, dispelling market expectations of an imminent peaceful resolution to the conflict. Conflict Escalates into Lebanon Geopolitical tensions in the Middle East have escalated to a higher-risk phase for markets. Previously focused on US-Iran tensions, the conflict has now shifted to open confrontation between Israel and Lebanon. Israeli Prime Minister Benjamin Netanyahu has formally ordered his military to expand ground operations into southern Lebanon, disregarding a ceasefire framework discussed over six weeks ago. This aggressive move aims to target military infrastructure and Hezbollah’s capabilities. In the latest ground operation, Israeli forces reportedly seized the strategic Beaufort Castle and are advancing further north towards the Zaharani River. The intensifying military operations have effectively dashed hopes for a successful Washington-mediated peace deal, particularly after representatives from both sides failed to finalise an agreement last weekend. Hormuz Strait Supply Threat The escalating conflict poses a direct threat to global energy supply chains. Market concerns stem not only from land warfare in Lebanon but also heightened maritime security risks. Reports suggest potential mine-laying in the Strait of Hormuz, a critical waterway through which around 20% of global oil and gas supplies flow. This indicates that clearing and normalising these strategic shipping routes could take considerable time, even if a political settlement is eventually reached. Concerns over Middle Eastern energy supply disruptions have dominated oil market sentiment, overshadowing last weekend’s Chinese economic data showing a slowdown in manufacturing activity. Domestic Fuel Price Impact Global crude oil price dynamics and international energy market fluctuations serve as key indicators for domestic energy policy. In response to market movements, PT Pertamina Patra Niaga has officially adjusted prices for several non-subsidised petroleum products, effective June 1, 2026. The adjustments are routine measures factoring in international energy price trends and government-set pricing formulas to ensure sustainable national distribution. For diesel products, Pertamina reduced prices. Dexlite (CN 51) was lowered to Rp23,000 per litre from Rp26,000. Similarly, Pertamina Dex (CN 53) was cut from Rp27,900 to Rp24,800 per litre. The move is expected to boost operational efficiency for the national logistics and transport sectors. Conversely, high-octane gasoline Pertamax Turbo (RON 98) saw an increase to Rp20,750 per litre from Rp19,900. Meanwhile, Pertamax (RON 92) and Pertamax Green 95 (RON 95) remained unchanged at Rp12,300 and Rp12,900 per litre respectively.