Oil prices surged over 2% in early trading on Monday following Israel’s decision to advance troops into Lebanon amid ongoing hostilities with the Iranian-backed Hezbollah militant group, despite a ceasefire that had been announced over six weeks ago. As of 1112 GMT, U.S. crude futures increased by $2.17, or 2.48%, to $89.53 per barrel, while Brent futures climbed by $1.93, or 2.12%, to reach $93.05 per barrel.
The escalation of fighting coincided with the U.S. hosting peace talks between Israel and Lebanon in Washington on Friday, which diminished hopes for a swift extension of the ceasefire agreement with Iran. This agreement had previously contributed to gains in Brent and WTI prices, settling up 1.8% and 1.7%, respectively, on Friday.
The Israel-Lebanon conflict represents a significant extension of the Iran war, originating on March 2, when Hezbollah initiated assaults with rockets and drones directed at Israel to support its ally, Iran. Although both sides declared a ceasefire in mid-April, hostilities have persisted.
U.S. President Donald Trump stated on Friday that a decision regarding the proposed extension of the ceasefire with Iran would be forthcoming. This extension would grant negotiators additional time to pursue a lasting resolution to the conflict and address issues surrounding Iran’s nuclear program. The inclusion of Israel is deemed essential for any prospective agreement, while Iran has consistently maintained that Hezbollah must be part of the discussions.
Concerns are increasing about the presence of mines in the critical oil and gas trading route, the Strait of Hormuz. IG analyst Tony Sycamore noted that this situation could prolong the reopening of the strait, potentially delaying relief to the oil market even after it is restored. “Even if an agreement is reached, it won’t deliver a flood of supply,” Sycamore remarked.
An Axios reporter indicated on Friday via social media that Iran had placed additional mines in the strait earlier that week, shortly after U.S. Defense Secretary Pete Hegseth warned that any mining efforts would breach the ceasefire.
The Strait of Hormuz is vital for approximately 20% of global oil and gas shipments, and Iran has largely impeded access to it since the onset of the conflict following U.S. and Israeli strikes in February. Worries regarding supply have overshadowed lackluster economic data from China released over the weekend, which highlighted stagnating factory activity and raised concerns about the world’s second-largest economy losing momentum due to declining exports and escalating cost pressures.
Published on June 1, 2026.
