Oil prices climbed nearly 2% on Monday as Israeli forces advanced deeper into Lebanon, reigniting fears of a broader regional conflict involving Iran-backed Hezbollah.
The move has cast doubt on the stability of the recent ceasefire between U.S. and Iranian interests in the region.
Brent crude saw a notable increase, reflecting heightened market anxiety over potential supply chain disruptions.
The renewed hostilities have triggered a repricing of risk in energy markets, with traders factoring in the possibility of renewed volatility in the Middle East.
The situation echoes previous flare-ups in the region, including the recent exchange of fire between U.S. and Iranian forces in the Strait of Hormuz.
Such incidents have historically led to sharp price swings in oil markets due to the area's critical role in global energy trade.