Global crude oil prices rebounded sharply early Monday after Israel expanded its military offensive in Lebanon, renewing concerns that escalating tensions in the Middle East could further disrupt already strained global energy supplies.
As at 04:13 a.m. (WAT), Brent crude rose 2.14 per cent to $93.07 per barrel, while US West Texas Intermediate crude gained 2.55 per cent to $89.59 per barrel, reversing part of last week’s steep losses.
The market rally followed reports that Israeli forces crossed the Litani River, declared areas south of the Zahrani River a combat zone, captured the strategic Beaufort Castle in southern Lebanon and moved to deepen operations against Hezbollah on the orders of Prime Minister Benjamin Netanyahu.
The latest escalation has unsettled oil traders who had spent much of last week pricing in the possibility of a diplomatic breakthrough between the United States and Iran. Expectations of a ceasefire extension and talks around reopening the Strait of Hormuz had pushed crude prices lower, with investors betting that smoother tanker movement could ease pressure on global oil flows.
However, no formal agreement has been reached. While US President Donald Trump has said his administration would make a final determination on the proposed ceasefire framework, uncertainty continues to surround the negotiations.
Lebanon’s growing role in the broader regional crisis is also amplifying market concerns. Iranian officials have repeatedly indicated that developments in Lebanon would form a key part of any wider peace arrangement with Washington, increasing fears that deeper fighting could complicate diplomatic efforts and prolong supply uncertainty.
The Strait of Hormuz remains at the centre of the market’s calculations. The strategic waterway handles a significant portion of global crude oil and liquefied natural gas shipments, and months of disruption around the corridor have kept energy markets highly sensitive to any geopolitical shift.
Under normal conditions, weak economic signals from China would weigh on oil prices. Fresh data showing sluggish factory activity in the world’s second-largest economy pointed to softer industrial demand and slowing exports. Yet supply risks tied to the Middle East conflict continue to outweigh demand concerns.
For oil-producing economies such as Nigeria, the rebound in crude prices could offer short-term support for export earnings and fiscal inflows. But analysts warn that prolonged instability across the Middle East could sustain volatility in oil markets, complicating energy planning and price outlooks globally.