The fate of Ali Karaki, a senior Hezbollah leader, remains uncertain after an Israeli strike targeted him in southern Beirut on Monday evening. The Lebanese Health Ministry reported that at least 274 people have died, including 39 women and 21 children, with 1,024 others wounded due to ongoing Israeli attacks.
Despite the escalating conflict, oil prices fell on Monday. Brent crude for November delivery dropped 1.8% to $73.22 per barrel, while WTI crude for October delivery decreased 1.9% to $69.68 per barrel.
Egypt’s Foreign Minister Badr Abdelatty warned of the increasing risk of a regional war as fighting intensifies between Israel and Hezbollah. This escalation has complicated ceasefire negotiations between Israel and Hamas in Gaza, which have been ongoing for months without resolution. “There is great concern about the potential for an all-out regional war,” Abdelatty told AFP, noting that the recent violence has harmed ceasefire talks.
The decline in oil prices could undo recent gains. Last week saw the largest price increase in six weeks, spurred by a significant interest rate cut from the Federal Reserve and heightened tensions in the Middle East. SEB commodities analyst Ole Hvalbye suggested that the softer monetary policy could lead to stronger future demand for crude oil.
According to Helima Croft from RBC Capital, Iran is a key factor in the oil markets. Currently, it appears to be avoiding escalating the conflict while benefiting from relaxed energy sanctions and high oil sales.
Market reactions are likely to be influenced by Washington’s announcement of additional troop deployments to the Middle East amid rising tensions. The Pentagon stated on Monday that more troops would be sent, though specific numbers were not disclosed. Currently, about 40,000 U.S. troops are stationed in the region.
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