Oil climbs as Israel expands Lebanon operations

June 01, 2026 (MLN): International oil prices moved higher on Monday after Israel declared an expansion of military operations in Lebanon, raising fears of increased instability in the Middle East and potential disruptions to regional energy supplies.

Currently, Brent crude futures are up by $2.02, or 2.22%, to $93.14 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures are up by 2.68%, to $89.7 per barrel by [10:34 am] PST.

Market sentiment was affected after Israeli Prime Minister Benjamin Netanyahu said he had directed the military to intensify its activities in Lebanon in coordination with Defense Minister Yisrael Katz.

The decision came despite a ceasefire that had been in place since April, according to CNBC.

The renewed tensions emerged shortly after U.S.-facilitated discussions between Israel and Lebanon were held in Washington on Friday, reducing expectations that diplomatic efforts could lead to a broader easing of regional conflicts.

Investors remain concerned that any escalation involving the Iran-backed Hezbollah movement could increase risks to oil supplies from the region.

Meanwhile, Goldman Sachs maintained their fourth-quarter 2026 forecasts of $90 per barrel for Brent crude and $83 per barrel for West Texas Intermediate (WTI), while noting that the outlook remains subject to significant uncertainty.

The investment bank said prolonged supply disruptions in the Middle East could drive oil prices above current expectations. However, it also cautioned that weaker-than-anticipated global demand could weigh on prices.

According to Goldman Sachs, disappointing oil retail sales figures recorded in April across China and Western Europe suggest a potential downside risk of roughly 2m barrels per day to its already modest demand projections, highlighting ongoing concerns about the strength of global fuel consumption.

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