Oil spikes 0.50% as Hezbollah and Israel launch large scale missile attacks against each other. With the global economy slowing due to China's recession, oil could rally to $80 and stay elevated for a prolonged period. This would be akin to an "oil shock".

(Chart 1)

(Chart 2)

After months of attempts at diplomacy from the West, namely America to try and gauge if a larger regional war may be on the cards, between Israel and Iran, including Iran's proxies.  The oil price has been trading within an average trading range of $76 and mostly on the downside, as the global economy begins to slow down dramatically on the back of China's recession.   An oil shock, from a wider Middle Eastern war could be called at $80 over a prolonged period of time, e.g., Three months.  This would undoubtedly complicate the Central Banks of the world wanting to cut rates, and it could also be argued that the global economy is already amidst stagflation lite rather than deflation. 

As the above *Chart/s show, the renewed projection/range of the oil price if a major war in the Middle East does materialise.  Resistance at $77 and $78, support at the psychological $75.

New headlines to date, re: Israel and Hezbollah.   

• Israel, Hezbollah exchange heaviest strikes in months, raising regional tension - Washington Post

• PM says strikes on Hezbollah ‘not end of story’ as allies warn against escalation - Times of Israel

• After Hezbollah strike on Israeli intelligence site, its leader says time will tell if ‘deterrence’ has been restored - Al Jazeera

*Please note, Price call out for re:  Israel/Hezbollah attacks, says "200" Israeli fighter planes, reports were of "100".  This has since been corrected.