Oil Prices Jump Over 2% as Israel Expands Lebanon Operations

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June 1, 2026 — Oil prices climbed more than 2% at the start of the week as escalating tensions in the Middle East heightened concerns about potential supply disruptions, with Israel expanding its military operations in Lebanon and the United States and Iran exchanging fresh strikes.

Oil extends gains on Middle East tensions.

Crude oil prices moved higher in early trading as investors reacted to renewed geopolitical risks across the region.

Brent crude futures rose $2.05, or 2.25%, to $93.17 per barrel, while U.S. West Texas Intermediate (WTI) crude gained $2.29, or 2.62%, to $89.65 per barrel.

The gains followed a period of volatility driven by hopes for diplomatic progress in the Middle East, which had previously weighed on oil prices.

Israel advances further into Lebanon.

Market concerns intensified after Israel ordered troops to move deeper into Lebanon in its campaign against Hezbollah.

The escalation came shortly after U.S.-hosted talks aimed at easing tensions between Israel and Lebanon, reducing expectations that broader regional conflicts could be resolved quickly.

US-Iran strikes add to supply concerns.

Oil markets were also affected by renewed military exchanges between the United States and Iran.

The U.S. said it carried out what it described as defensive strikes against Iranian targets, while Iran responded with attacks on facilities linked to U.S. operations. These developments renewed concerns over energy flows through the region.

The Strait of Hormuz remains in focus.

Investors continued monitoring developments in the Strait of Hormuz, one of the world's most important oil shipping routes.

Analysts warned that ongoing security concerns and reported mine activity could delay any normalization of energy exports, limiting potential increases in global supply even if diplomatic agreements are reached.

Demand concerns temper bullish outlook.

Despite the latest rally, some analysts cautioned that weaker oil demand in major economies could limit further gains.

Goldman Sachs noted that soft demand conditions in China and Europe remain a downside risk for crude prices, although ongoing Middle East supply disruptions could continue to provide support..