Analysts warn Israel-Lebanon tensions could escalate into a wider regional conflict

Oil traders and analysts are growing increasingly conscious of the escalating Israel-Hezbollah conflict, with concerns over the potential disruption to oil supply in the region.

PHOTO: Oil barrels. Getty Images

Israel launched a barrage of missiles into Beirut yesterday, specifically targeting the Iran-aligned Hezbollah armed group’s bases in the country, according to the Israel Defense Forces (IDF).

“So far, more than 300 Hezbollah targets have been struck,” the IDF claimed, warning Lebanese civilians to vacate their houses as the airstrikes are expected to continue.

Market analysts warn that further escalation between Israel and Hezbollah could drag Iran into the conflict, threatening oil production in OPEC's second-largest producer.

“The oil market has been concerned that rising tensions in the region were dragging the OPEC oil producer [Iran] closer to engagement,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.

The attack comes one day after the Lebanon-based armed group launched several missiles into northern Israel after prominent leaders of the group were “eliminated” last week.

Brent’s price felt some upward pressure after “Israel launched massive air strikes on Hezbollah targets in Lebanon on Monday,” VANDA Insights’ founder and analyst Vandana Hari said.

By Aparupa Mazumder

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