Oil rises as Middle East tensions deepen

Oil drilling rigs

Oil was trading higher in early session today, Aug. 26, as tensions in the Middle East escalated after an Israeli strike on Hezbollah targets in southern Lebanon.

Brent crude was trading up 0.66% at $79.54 at 08:01 am Makkah time. WTI crude rose 0.68% to $75.34 a barrel.

Warren Patterson, Head of Commodity Strategy at ING, said that despite the increased risks in the Middle East after the recent escalation, the market has become immune to the tensions that have continued for nearly a year and not affected oil supplies.

Oil prices are slightly higher this year amid geopolitical risks and an expected US interest rate cut in September after Federal Reserve Chairman Jerome Powell gave his most definitive signal yet at the Jackson Hole symposium that his job of fighting inflation had been accomplished and that it was time to adjust monetary policy.