Oil Rises Over 3%, Hits $76 As Middle East Tensions Mount: Israel Strikes UN Peacekeeper Bases In Lebanon, Threats Against Gulf Oil Facilities Emerge

Crude oil prices surged more than 3% on Thursday, driven by mounting concerns over potential supply fears in the Middle East as well as domestic disruption related to Hurricane Milton.

The spike comes as Israel ramps up military actions in Lebanon and as Gulf nations brace for retaliatory strikes if Israel targets Iranian oil sites.

West Texas Intermediate (WTI) crude, tracked by the United States Oil Fund USO, rose 3.5% to hit $76 per barrel, extending its month-to-date gain to 11%. October is shaping up to be the strongest month for oil prices in over a year, with 15 trading days remaining.

Gulf States Urge Restraint As Conflict Risks Escalate

Sources close to Gulf governments told Reuters that Saudi Arabia, the United Arab Emirates and Qatar are lobbying the U.S. to prevent Israel from striking Iran’s oil infrastructure. These nations are concerned that any Israeli action could lead to retaliatory strikes by Iran's proxies targeting oil facilities in the Gulf.

Gulf countries have also refused to allow Israel to use their airspace for any potential military operation against Iran, Reuters reported, aligning with earlier warnings from Tehran, which threatened retaliation against any country permitting Israeli overflights.

Israel Intensifies Strikes On Lebanon, Italy Condemns Attacks On UN Peacekeepers

The conflict between Israel and Hezbollah took another dangerous turn Thursday night as Israeli airstrikes in Lebanon killed 18 people and wounded at least 92, with a senior Hezbollah figure reportedly targeted in the attacks, according to Lebanon’s health ministry.

Diplomatic tensions have also flared between Israel and Italy after Israeli forces fired at U.N. peacekeeper positions in Naqoura, southern Lebanon.

On Thursday, Israeli tank fire at a watchtower injured two Indonesian peacekeepers, and in a separate incident damaged two Italian bases.

Italian Prime Minister Giorgia Meloni called the attacks “unacceptable,” while Defense Minister Guido Crosetto labeled the act as a possible war crime.

The United Nations Interim Force in Lebanon (UNIFIL) rejected Israel’s recommendation for U.N. peacekeepers to relocate 5 kilometers north.

The European Union and other UNIFIL-contributing nations, such as Spain and France, have expressed strong condemnation of the attacks, emphasizing Israel’s obligation to protect U.N. peacekeepers. France and Italy are set to convene a videoconference next week with European countries involved in the mission to discuss the escalating situation.

The United States has also voiced concern over the increasing instability in the region as diplomatic efforts to defuse tensions continue.

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