Finance Link News on September 29 (Editor Xiaoxiang) With Hezbollah in Lebanon confirming the death of its leader, Nasrallah, in an Israeli airstrike, the geopolitical tension in the Middle East unavoidably faces another significant escalation this weekend.

However, for the international oil prices that have always been sensitive to the situation in the Middle East, are they really prepared for this now? The well-known Wall Street giant Goldman Sachs is undoubtedly very worried about this.

In a report released by Goldman Sachs on Friday evening local time, it was pointed out that the oil market is currently lacking a war risk premium. Goldman Sachs analyst Lindsay Matcham stated, 'In the escalating tension between Hezbollah and Israel, we will continue to closely monitor the conflict in the Middle East.'

Matcham added, 'We believe that further escalation of the conflict could have a significant impact on the market, especially if the conflict involves the potential closure of the Strait of Hormuz, which could lead to a spike in local oil prices.'

According to media reports, on the night of the 27th, the Israeli Defense Forces launched an airstrike on the Hezbollah headquarters in Dahieh, southern Beirut, targeting Nasrallah, who has long been the leader of Hezbollah. The Israeli Air Force used advanced bunker-buster bombs aimed at destroying the underground command center in residential buildings used by Hezbollah. Later that day, the Israeli military claimed to have killed the leader of the organization, Nasrallah, in a 'precise strike' operation. Later that night, Hezbollah also confirmed the death of the leader Nasrallah.

Undoubtedly, the attack on Nasrallah is not the end of Israeli action. According to Agence France-Presse, the Israeli military said in a statement on the 28th that the IDF carried out a 'major strike' on dozens of Hezbollah targets that day. Hezbollah claimed to have launched rocket attacks on northern Israel.

From the developments of the past week, Israel's attacks have led to the death of over 700 people in Lebanon. The number of people forced to flee their homes in Lebanon due to the conflict has now exceeded 250,000.

The escalation of the situation has continued to intensify people's concerns about the possibility of the conflict spiraling out of control, thus involving Hezbollah's main supporters Iran and the United States.

On Saturday, Faras Makssad, a senior researcher at the American think tank Middle East Institute, stated that the news of Nasrallah's assassination would lead to "significant" regional consequences. "Nasrallah is the most outstanding and iconic Arab leader of the 'Iranian Resistance Axis.' His assassination symbolizes a direct confrontation looming between Israel and Iran over the future of Lebanon and the Levant. This is likely the beginning of an upcoming conflict, not the end.

Looking at the recent trend in oil prices, compared to the ongoing escalation of the geopolitical situation in the Middle East, the oil market's attention or response to this is clearly lacking. This week, Brent crude oil futures fell by about 3%, while US WTI crude oil futures fell by about 5%, as reports emerged that Saudi Arabia decided to abandon the $100 oil price target and instead increase production to capture more market share.

However, Goldman Sachs analyst Lina Thomas highlighted four short-term positive driving factors in the crude oil market in another recently released report, one of which mentioned trends in the Middle East.

Loose global monetary policy;

Crude oil inventories are still being consumed;

Oil market positions and valuations remain low;

The oil market has yet to factor in the significant risks of geopolitical turmoil.

In fact, many industry insiders have indicated that with speculators making record-setting bearish bets in the crude oil market, the threat of a short squeeze in the oil market is indeed continuing to grow.

US Defense Secretary Austin also pointed out on Friday local time that Israel's attack on Hezbollah's central headquarters did not inform him beforehand. He warned that if Israel fully engages in war with Hezbollah, it would have "devastating" consequences, with casualties potentially "rivaling or exceeding" those in Gaza. He reiterated that the United States hopes to resolve the crisis through diplomatic means, and mentioned that Israeli forces may launch a ground attack on Lebanon, which could escalate the situation into a regional conflict.