Oil jumps over $2 as Israel strikes Lebanon despite truce, dashing hopes for Hormuz reopening
The renewed violence wiped out most of Friday's losses, when prices had fallen on cautious optimism about a possible de-escalation in the broader US-Iran conflict
- Jun 8, 2026,
- Updated Jun 8, 2026 8:35 AM IST
A ceasefire that had barely taken hold has already begun to unravel, and oil markets reacted immediately. Crude prices jumped more than two dollars a barrel on Monday after Israel launched fresh strikes on Lebanon on Sunday, just days after both countries had agreed to a truce following negotiations in Washington.
The renewed violence wiped out most of Friday's losses, when prices had fallen on cautious optimism about a possible de-escalation in the broader US-Iran conflict.
US crude futures rose $2.10, or 2.32%, to $92.64 per barrel, while Brent crude climbed $2.33, or 2.5%, to $95.42 a barrel as of early Monday morning GMT.
Why the Lebanon strikes matter for oil
The immediate concern for energy markets is not Lebanon itself but what the strikes signal for the wider peace process. Iran has made a ceasefire in Lebanon a non-negotiable condition for any deal with Washington, meaning that as long as Israeli military operations continue against Hezbollah, the path to a US-Iran agreement remains blocked. And without that agreement, the Strait of Hormuz, which has been effectively closed to most shipping since the war began with US and Israeli strikes on Iran in February, stays shut.
Iran retaliated for the Beirut strikes on its Hezbollah ally by launching missiles at Israel. US President Donald Trump said he would tell Israeli Prime Minister Benjamin Netanyahu not to retaliate against Iran in response.
A pattern of broken ceasefires
Sunday's strikes are not the first time a Lebanon ceasefire has collapsed. Israel invaded Lebanon in March after Iran-backed Hezbollah fired rockets and drones across the border. The two countries reached a prior cessation of hostilities in April, but violence continued despite that agreement. The June 3 truce, reached after Washington-brokered negotiations, appeared to follow the same pattern within days.
The broader US-Iran conflict has been on pause since Washington and Israel halted direct attacks on Iran in early April, but Tehran has continued to block most shipping through the Strait of Hormuz, keeping global energy supplies under sustained pressure.
OPEC+ output decision dismissed
OPEC+ on Sunday agreed to its fourth consecutive monthly output increase. The decision, however, drew immediate scepticism from analysts who pointed out that most OPEC+ members were unable to meet their existing production targets, either because of the Hormuz closure or, in Russia's case, infrastructure damage that has eroded its production capacity.
"In the current market, the physical impact of such a decision would be close to zero," said Jorge Leon, head of geopolitical analysis at Rystad Energy, in a research note.
(With inputs from Reuters)
A ceasefire that had barely taken hold has already begun to unravel, and oil markets reacted immediately. Crude prices jumped more than two dollars a barrel on Monday after Israel launched fresh strikes on Lebanon on Sunday, just days after both countries had agreed to a truce following negotiations in Washington.
The renewed violence wiped out most of Friday's losses, when prices had fallen on cautious optimism about a possible de-escalation in the broader US-Iran conflict.
US crude futures rose $2.10, or 2.32%, to $92.64 per barrel, while Brent crude climbed $2.33, or 2.5%, to $95.42 a barrel as of early Monday morning GMT.
Why the Lebanon strikes matter for oil
The immediate concern for energy markets is not Lebanon itself but what the strikes signal for the wider peace process. Iran has made a ceasefire in Lebanon a non-negotiable condition for any deal with Washington, meaning that as long as Israeli military operations continue against Hezbollah, the path to a US-Iran agreement remains blocked. And without that agreement, the Strait of Hormuz, which has been effectively closed to most shipping since the war began with US and Israeli strikes on Iran in February, stays shut.
Iran retaliated for the Beirut strikes on its Hezbollah ally by launching missiles at Israel. US President Donald Trump said he would tell Israeli Prime Minister Benjamin Netanyahu not to retaliate against Iran in response.
A pattern of broken ceasefires
Sunday's strikes are not the first time a Lebanon ceasefire has collapsed. Israel invaded Lebanon in March after Iran-backed Hezbollah fired rockets and drones across the border. The two countries reached a prior cessation of hostilities in April, but violence continued despite that agreement. The June 3 truce, reached after Washington-brokered negotiations, appeared to follow the same pattern within days.
The broader US-Iran conflict has been on pause since Washington and Israel halted direct attacks on Iran in early April, but Tehran has continued to block most shipping through the Strait of Hormuz, keeping global energy supplies under sustained pressure.
OPEC+ output decision dismissed
OPEC+ on Sunday agreed to its fourth consecutive monthly output increase. The decision, however, drew immediate scepticism from analysts who pointed out that most OPEC+ members were unable to meet their existing production targets, either because of the Hormuz closure or, in Russia's case, infrastructure damage that has eroded its production capacity.
"In the current market, the physical impact of such a decision would be close to zero," said Jorge Leon, head of geopolitical analysis at Rystad Energy, in a research note.
(With inputs from Reuters)