Oil prices slid by more than 1% on Monday, reflecting persistent concerns over weakened global demand despite the escalating conflict between Israel and Hezbollah in the Middle East. Investors appeared more focused on the macroeconomic picture of slowing global consumption rather than the immediate geopolitical risks that could disrupt energy supplies.

U.S. energy stocks, tracked by the Energy Select Sector SPDR Fund XLE, remained mostly flat during the final hour of New York trading.

Israel-Hezbollah Conflict Intensifies: 650 Air Strikes In 24 Hours

On Monday, Israel launched its most extensive air campaign yet against Hezbollah targets in southern Lebanon. The Israeli military carried out 650 air strikes in the past 24 hours, hitting over 1,100 targets with more than 1,400 munitions, as reported by Reuters.

The attacks targeted Hezbollah’s military infrastructure, including rocket launchers and underground weapon storage facilities.

Tens of thousands of civilians in southern Lebanon have begun fleeing towards the north, leading to severe traffic congestion on key roads as the population seeks safety. The conflict, which has simmered for nearly a year, is showing signs of spiraling into a larger regional crisis.

“Essentially, we are targeting combat infrastructure that Hezbollah has been building for the past 20 years. This is very significant. We are striking targets and preparing for the next phases,” Israeli Prime Minister Benjamin Netanyahu said in a statement.

The international response to the intensifying conflict has been swift. The Pentagon announced plans to send additional troops to the Middle East as a precautionary measure amid the growing instability. Both Vice President Kamala Harris and President Joe Biden are scheduled to hold separate meetings with UAE President Sheikh Mohamed bin Zayed Al Nahyan to discuss the ceasefire deal in Gaza.

Stéphane Dujarric, spokesperson for U.N. Secretary-General Antonio Guterres, expressed concern over the growing number of civilian casualties reported by Lebanese authorities. “The Secretary-General is deeply worried about the rising toll on civilian lives and the broader implications for regional stability,” Dujarric stated.

Reactions from other regional players in Middle East were largely critical of Israel’s actions. Turkey’s Foreign Ministry condemned Israel’s air strikes, calling them “a new phase in its efforts to drag the entire region into chaos.”

Iranian President Masoud Pezeshkian, speaking to journalists upon his arrival in New York for the United Nations General Assembly, accused Israel of provoking a wider conflict. “Israel wants to drag the Middle East into a full-blown war by provoking Iran to join the nearly year-old conflict between Israel and Tehran-backed Hezbollah in Lebanon,” Pezeshkian said.

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