General view Towers and oil platforms State Oil Company of Venezuela, Oil Company of Venezuela SA.
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Oil prices did not react on Monday after Hezbollah confirmed that its leader was killed on Friday in an Israeli airstrike in the Lebanese capital of Beirut.
Over the weekend, the Israel Defense Forces reported that Hassan Nasrallah, who has led the Iran-backed militant group Hezbollah for more than three decades, was killed on Friday in a “targeted attack” on the group’s headquarters in Beirut.
Hezbollah, which is classified as a terrorist organization by several countries including the US and the UK, is known for its violent opposition to Israel and its resistance to Western influence in the Middle East, according to the US Director of National Intelligence and the London Assembly.
The incident comes after months of conflict and has raised concerns about a wider conflict involving Iran. The IDF characterized Nasrallah as a “central decision maker” and “strategic leader.”
But the oil market did not see a significant surge. Global benchmark Brent added 1.56% to $73.10 a barrel, while US West Texas Intermediate futures traded 1.09% higher at $68.19 a barrel.
As hostilities across the Middle East escalate, there is no shortage of oil supplies, said Andy Lipow, president at Lipow Oil Associates.
“Oil markets do not expect an all-out war between Iran and Israel to impact supply,” he told CNBC via email.
Since the Hamas-Israel conflict that began last year, disruptions in the oil market have been limited. The oil market also remained under pressure as increased production from the US, Canada and Guyana added to the supply picture, on top of Chinese demand that stalled when OPEC+ delayed the restoration of production cuts, Lipow explained.
“The removal of Hezbollah’s leadership may cause a response that will affect the supply of oil, but because it does not directly affect (the supply of oil) … , CIO at Bison Interests.
However, the two experts noted that a swift conflict could lead to crude oil prices reaching $100 per barrel.
The biggest risk to the oil market is the closure of the Strait of Hormuz, Lipow said. Although unlikely, oil prices would rise by $30 per barrel if that happened, he added.
“If it happens quickly, a material disruption to Iran’s oil supply or oil exports through the Strait of Hormuz could send oil prices over $100 a barrel,” Young said.
The strait, between Oman and Iran, is an important channel through which about a fifth of global oil production flows each day, according to the US Energy Information Administration. It is a strategically important waterway that connects crude oil producers in the Middle East with major markets around the world.
Tens of thousands of people on both sides of the Israeli-Lebanese border have been forced to evacuate their homes due to cross-border fire in the month following the Hamas attack on Israel on October 7, with Hezbollah throwing its support behind the Palestinian militant group. Hamas.
