Oil prices climbed more than two percent in early Monday trading after Israel ordered its forces to deepen their advance into Lebanon, rekindling supply fears across markets that had already been on edge over the state of the US-Iran ceasefire.
US crude futures rose $2.17, or 2.48%, to $89.53 a barrel as of 2312 GMT on Sunday. Brent added $1.93, or 2.12%, to reach $93.05.
The move reversed losses from Friday, when both benchmarks had fallen roughly 1.7–1.8% after the escalation cast doubt on the likelihood of the US and Iran announcing an imminent extension of their ceasefire. That agreement, reached in early April, had given negotiators time to pursue a permanent resolution to the conflict over Iran’s nuclear programme.
The renewed fighting came almost immediately after Washington hosted Israeli-Lebanese talks on Friday. Donald Trump said later that day he would decide soon whether to extend the Iran ceasefire. Iran has consistently insisted Hezbollah must be part of any such deal.
Adding to the uncertainty is the state of the Strait of Hormuz. Axio reported on Friday that Iran had laid additional mines in the strait earlier in the week, shortly after US Defense Secretary Pete Hegseth warned that further mining would breach the ceasefire terms. Tehran has effectively kept the strait closed since the conflict began following American and Israeli strikes on Iran at the end of February. Around a fifth of global oil and gas flows pass through Hormuz.
Tony Sycamore, analyst at IG, cautioned in a note that even a deal might not bring immediate supply relief. “Even if an agreement is reached, it won’t result in a flow of supplies,” he said, citing the mines as a factor likely to slow any reopening.
Weighing against the price rise was weak manufacturing data out of China, which showed factory activity slowing under pressure from shrinking exports and higher costs. The supply concerns proved the stronger force.
