This photo taken from a location in northern Israel shows a Hezbollah drone intercepted by the Israeli Air Force over northern Israel on August 25, 2024. It was announced earlier on August 25 that it was launching a pre-emptive strike against a “large-scale” attack in Lebanon by the Iranian-backed militant group Hezbollah. Hezbollah said it fired more than 320 rockets into Israel overnight, targeting a series of military positions, although the Israeli military said it was conducting preemptive strikes against the group.
Under Marey | AFP | Getty Images
Vivek Dar, mining and energy commodities strategist at Commonwealth Bank of Australia, said tensions in the Middle East and the risk of wider conflict will keep oil prices higher.
Oil prices rose after Iranian-backed groups fired more than 320 rockets into Israel on Monday after the Israeli air force dispatched more than 100 fighter jets to attack targets in Lebanon.
US West Texas Intermediate Oil Crude oil rose 0.75% to $75.39 a barrel, while Brent crude oil Up 0.67% to $79.55.
Iran-backed Hezbollah said the attack was in retaliation for Israel’s killing of senior commander Fuad Shukr in Beirut last month. Reuters reported that Israel said its preemptive strike was aimed at thwarting a larger attack by Hezbollah.
“While market expectations focus on attacks by Iran that would hurt Israel without triggering a broader regional conflict, Israel’s response is equally important. Israel’s response could include attacks on Iranian oil supplies and related infrastructure, which would make 3% To 4% of countries are at risk.
Cedric Chehab, managing director and global head of risk at research firm BMI, said Sunday’s exchange of fire did not mean “all-out war” was imminent.
“What Hezbollah wants to do, what Iran wants to do, is essentially allow for deterrence. So, exercising that deterrence, they have done that,” Chehab said in an interview with CNBC’s “Squawk Box Asia.”
He added that while the confrontation risks escalating into a wider conflict, there is room for de-escalation.
Both Israeli and Iranian leaders “don’t want things to get out of hand and escalate… Don’t forget, Iran has a new, untested president whose idea is to put pressure on Israel but not necessarily engage in direct action” confrontation.
While Dar agreed with Chehab that Sunday’s events were unlikely to be the catalyst for an all-out war in the region, he noted that Iran has not yet taken action against Israel following the assassination of Hamas political leader Ismail Haniyeh. Take revenge.
Dar also said progress in ceasefire negotiations in Gaza will be an indicator of how Iran, Hezbollah and Hamas interpret the weekend’s events.
Earlier on Monday, Reuters reported No agreement on ceasefire reached during talks Regarding the conflict in Gaza, Egyptian security sources told the agency on Sunday that neither Hamas nor Israel agreed with the recommendations of Cairo mediators.
Dahl added that while the escalation ostensibly undermined the truce talks, the fact that Israel had successfully thwarted Hezbollah “could force Iran and its proxies to recognize that Israel is in a position of power, especially with U.S. support, making truce talks more Easy to accept.
He also predicted that September Brent crude oil futures will trade between US$75 and US$85 per barrel, if hopes for a ceasefire in Gaza fade and Iranian retaliation against Israel remains “possible.” The potential upside for futures is even greater.
“More broadly, the risk of a broader conflict in the Middle East and permanent involvement of Iran poses an upside risk to our outlook.”
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