Oil up with escalating conflict in Middle East, Chinese stimulus package

- Concern over possibility of a wider regional war fuels expectation of oil supply shortage

Oil prices continue to climb on Tuesday as conflicts in the Middle East escalate, increasing concern of a wider regional dispute.

International benchmark Brent crude increased by 1.31% to $74.17 per barrel at 11.03 a.m. local time (0803 GMT), up from the previous session's close of $73.21.

US benchmark West Texas Intermediate (WTI) rose by 1.53% to $71.45 per barrel after closing at $70.37 in the prior session.

Tensions are high in the Middle East, where most of the crude oil resources are located, amid ongoing attack between Israel and Lebanon.

The concern that tensions in the region could spread to surrounding countries fuels the expectation that there may be an oil supply shortage.

Israel has launched a barrage of airstrikes into southern and eastern Lebanon, with Lebanese health authorities saying that at least 492 people have been killed, including 35 children, and 1,645 injured in the attacks since Monday morning.

The escalating tension between the Israeli army and Lebanese Hezbollah reached its peak with the recent attacks.

The Israeli army's warplanes on Tuesday morning launched a series of airstrikes on southern and eastern Lebanon including airstrikes on the villages of Kafr Dounine and Sultaniyeh, with one of the airstrikes killing an entire family.

According to the official Lebanese National News Agency (NNA), Israel intensified airstrikes on the Baalbek-Hermel governorate in eastern Lebanon, forcing mass displacement of people to nearby areas, where they sheltered in mosques and halls.

Meanwhile, the Hezbollah group said it launched six missile strikes on military installations in northern Israel, including two airfields and an explosives factory.

The group said that the strikes were carried out to support 'the Palestinian people in Gaza and their courageous resistance' as well as to defend Lebanon.

The Israeli army's attacks on the Gaza Strip have been ongoing since Oct. 7, 2023, despite a UN Security Council resolution calling for an immediate cease-fire.

The Israeli military targeted several Palestinians in an attack on Khan Younis in the southern Gaza Strip on early Tuesday, leaving scores dead.

Since last year, nearly 41,391 people, mostly women and children, have since been killed and more than 95,760 injured, according to local health authorities.

Experts warn that a regional war may break out in the face of Israel's repeated attacks.

Meanwhile, The People's Bank of China announced measures to stimulate the economy, supporting the narrative that demand in the country could rise as well.

The measures encompass measures to revive the ongoing weakness in domestic demand and the struggling real estate sector.

By Zeynep Beyza Kilic

Anadolu Agency

energy@aa.com.tr