The missile attacks were preceded by rockets fired from Lebanon and Israeli ground operations in southern Lebanon remain limited. The rising tensions have raised concerns about broader instability in the Middle East, which could have a potential impact on global energy supplies.
Crude oil prices jumped following the news. West Texas Intermediate (WTI) jumped 5%, surpassing $71 a barrel after earlier falling 2.7%. Global benchmark Brent crude climbed above $75 a barrel. The involvement of Iran, an OPEC member and major player in the region, raised fears of a disruption in oil supplies from the region, which supplies about a third of the world’s crude.
According to experts, the oil market is highly sensitive to geopolitical risks in the region, and any disruption could push up energy prices. A rise in oil prices due to geopolitical tensions will make investors worry about a rise in inflation. A major conflict could also impact supply chains, which would not be good for inflation. PLC & GT
