Oil prices rose dramatically on Monday morning, with Brent moving above $81 and WTI heading towards $77.
While interest rate cut expectations had already boosted bullish sentiment in the markets, geopolitics and supply-related risks led to a surge in prices on Monday morning.
Israel's strikes against Hezbollah in Lebanon, Russia's major missile and drone attack on Ukraine, and the Libyan government's declaration of force majeure on all oil facilities in Benghazi resulted in a dramatic increase in oil prices.
All three incidents are developing stories, but here's what we know so far:
Massive increase in gunfire between Israel and Hezbollah
On Sunday morning, Israel launched a pre-emptive attack on Hezbollah in southern Lebanon. The exchange of fire between the two sides was the heaviest since the 34-day war in 2006.
Shortly before 5 a.m. local time, Israel launched 100 jets to target 40 sites in Lebanon that it claimed were preparing to fire missiles and rockets at Israel.
After this, Hezbollah claimed that it had fired more than 340 rockets at 11 military bases in Israel and the Golan Heights.
These attacks are likely to undermine the ceasefire talks underway in Egypt.
Russia launches major missile and drone attack targeting Ukrainian energy infrastructure
On Sunday night and Monday morning, Russia launched coordinated missile and drone attacks on Ukrainian cities and critical infrastructure.
President Zelensky claimed that Russia fired more than 100 missiles and about 100 attack drones overnight.
Russia says its goal was to damage critical infrastructure in the country, and that it succeeded in disrupting power supplies and cutting off water supplies.
There have been reports of explosions in Kiev and other Ukrainian cities.
Libya's eastern government to halt oil production and export
On Monday morning, the Libyan government in Benghazi said the country's oil fields were being shut down and all production and exports would cease.
Although the government is not internationally recognised, it controls most of the country's oil fields.
Tensions have been rising in Libya in recent weeks, with attempts to oust the head of Libya’s central bank resulting in the mobilisation of armed groups on both sides.
The combination of these three events has further increased bullish sentiment, and oil prices are likely to face another volatile week as these stories develop.
By Josh Owens for OilPrice.com
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