Oil Prices Surge as Israel Expands Lebanon Offensive, Escalating Middle East Tensions

Oil prices rose sharply in early Asian trading on Monday, June 1, 2026, as Israeli forces expanded operations in Lebanon, heightening fears of a broader regional conflict. West Texas Intermediate crude gained 2.88% to $89.88 per barrel, while Brent crude added 2.43% to $93.33. Israeli troops crossed the Litani River and captured the strategic Beaufort Castle after Prime Minister Netanyahu ordered deeper operations against Hezbollah. U.S.-hosted talks between Israeli and Lebanese officials, described as “productive” Friday, now hang in the balance. The escalation threatens already strained global supplies following Iran’s closure of the Strait of Hormuz. President Trump said he would soon decide on extending a ceasefire framework with Iran, which could potentially reopen the key shipping chokepoint, but gave no timeline. Weak Chinese factory activity reinforced demand concerns, yet analysts said Middle East supply risks remain the dominant price driver until a long-term solution is found.