Oil prices rose significantly on Monday morning, with Brent crude breaking through the $81 barrier and West Texas Intermediate crude rising towards $77.
While hopes for a rate cut had already boosted bullish sentiment in markets, it was geopolitics and supply risks that drove prices higher on Monday morning.
The combination of Israel launching strikes against Hezbollah in Lebanon, Russia launching a major missile and drone attack on Ukraine and the Libyan government in Benghazi declaring force majeure on all oil facilities has sent oil prices soaring.
These three events evolve over time, but here’s what we know so far:
Israel and Hezbollah exchange fire in major escalation
Early Sunday morning, Israel launched what it claimed was a preemptive strike against Hezbollah in southern Lebanon. The exchange of fire between the two sides was the first reaction from both sides. greater than Since they fought a 34-day war in 2006.
Just before 5 a.m. local time, Israel launched 100 jet aircraft at 40 sites in Lebanon that it claimed were preparing to launch rockets and missiles at Israel.
Hezbollah later announced that it had fired more than 340 missiles at 11 military targets in Israel and the Golan Heights.
These attacks are likely to undermine ongoing ceasefire talks in Egypt.
Russia attacks Ukraine’s energy infrastructure with missiles and drones
On Sunday night and early Monday morning, Russia was released Coordinated missile and drone attack on cities and critical infrastructure across Ukraine.
President Zelensky said Russia launched more than 100 missiles and around 100 attack drones overnight.
Russia says its aim was to attack the country’s critical infrastructure, successfully causing power outages and disrupting water supplies.
There were reports of explosions in kyiv and other Ukrainian cities.
Libya’s eastern government announces halt to oil production and exports
On Monday morning, the Libyan government in Benghazi announced He said The country’s oil fields will be shut down and all production and exports will be halted.
Although the government has no international recognition, it controls most of the country’s oil fields.
Tensions have been rising in Libya in recent weeks, with attempts to overthrow the head of Libya’s central bank prompting the mobilization of armed factions on both sides.
The combination of these three developments has only served to reinforce bullish sentiment and will likely lead to another volatile week for oil prices as these stories unfold.
Written by Josh Owens for Oilprice.com
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