Oil prices rise more than 2% in early trading on Monday after Israel ordered troops deeper into Lebanon despite a ceasefire announced more than six weeks ago.
US crude futures rose $2.17, or 2.48%, to $89.53 a barrel as of 1112 GMT. Brent crude futures gained $1.93, or 2.12%, to $93.05 a barrel.
The latest fighting came after the United States hosted Israeli-Lebanon peace talks in Washington on Friday. The escalation reduced expectations for a quick extension of the US-Iran ceasefire agreement.
Brent and West Texas Intermediate had settled 1.8% and 1.7% higher on Friday. The gains followed hopes that talks could support a longer ceasefire and reduce regional supply risks.
The Israel-Lebanon conflict began on March 2, when Hezbollah fired rockets and drones into Israel in support of Iran. The two sides reached a ceasefire in mid-April but continued to trade fire.
US President Donald Trump said Friday he would soon decide on a proposed extension to the ceasefire with Iran. The plan aims to give negotiators more time to seek a permanent end to the conflict and address Iran’s nuclear programme.
Supply concerns also increased over reports of mines in the Strait of Hormuz. IG analyst Tony Sycamore said any agreement would not deliver “a flood of supply” if the key shipping lane reopened slowly.
An Axios reporter said on X that Iran had dropped more mines in the strait earlier in the week. US Defence Secretary Pete Hegseth said attempts to lay more mines would violate the ceasefire.
Read: Israel Lebanon Ground Offensive Expanded By Netanyahu
The Strait of Hormuz carries about a fifth of global oil and gas flows. Iran has effectively closed the route since the conflict began with US and Israeli strikes in February.
Supply fears outweighed weak economic data from China, where weekend figures showed stalled factory activity and renewed pressure on exports.
