CBA analyst predicts that oil prices will stay high due to the possibility of a broader conflict resulting from tensions in the Middle East.

• Vivek Dhar, mining and energy commodities strategist at the Commonwealth Bank of Australia, stated that Israel's response may involve an attack on Iran's oil supply and related infrastructure, which could put at risk 3% - 4% of global oil supply.
• In September, Brent is predicted by Dhar to trade within the range of $75 to $85 per barrel due to the decreasing chances of a ceasefire in Gaza and the anticipated Iranian response against Israel.
• Cedric Chehab, managing director and head of global risk at research firm BMI, stated that the exchange of fire on Sunday does not indicate an 'all-out war' is imminent.

Vivek Dhar, mining and energy commodities strategist at the Commonwealth Bank of Australia, stated that tensions in the Middle East and the risk of a wider conflict will keep oil prices high.

On Monday, oil prices increased following Israel's Air Force's attack on Lebanon with over 100 fighter jets, which led to the Iran-backed group launching more than 320 rockets into Israel.

While crude increased by 0.75% to $75.39 a barrel, oil rose by 0.67% to $79.55.

Hezbollah, backed by Iran, carried out retaliatory strikes against Israel after the killing of senior commander Fuad Shukr in Beirut last month. Israel claimed its preemptive strikes were aimed at preventing a larger attack by Hezbollah, according to Reuters.

Dhar stated that although market anticipations center on Iran's attack negatively affecting Israel without sparking a broader regional conflict, Israel's response will also be crucial. Moreover, Israel's response may involve an attack on Iran's oil supply and related infrastructure, which would endanger 3-4% of global oil supply.

Cedric Chehab, managing director and head of global risk at research firm BMI stated that the exchange of fire on Sunday does not indicate an "all-out war" is imminent.

Chehab stated on CNBC's "Squawk Box Asia" that Hezbollah and Iran aimed to achieve deterrence through their actions. To exercise that deterrence, they have carried out their plans.

Although there is a possibility that the confrontation may escalate into a larger conflict, there is still an opportunity for de-escalation, he stated.

Both Israeli and Iranian leaders are working to prevent the situation from escalating and to avoid direct confrontation, as Iran has a new president who is untested and the goal is to put pressure on Israel.

Although Dhar concurred with Chehab's belief that the occurrences on Sunday are unlikely to spark a full-scale war in the region, he emphasized that Iran has not yet retaliated against Israel after the assassination of Ismail Haniyeh, the leader of Hamas, in Tehran last month.

The progress of Gaza truce talks will reveal how Iran, Hezbollah, and Hamas view the weekend's events.

On Monday, Reuters reported that there was no agreement on a ceasefire in talks about the Gaza conflict, as Egyptian security sources said that neither Hamas nor Israel agreed to the proposals presented by mediators in Cairo on Sunday.

While the escalation harms truce talks at face value, Israel's ability to thwart Hezbollah may force Iran and its proxies to concede that Israel is in a position of power, particularly with U.S. backing, making the truce talks more palatable.

He predicts that Brent futures will trade between $75 and $85 a barrel in September, with more potential upside if hopes for a truce in Gaza decrease, and as an Iranian reprisal against Israel remains a possibility.

"The possibility of a broader conflict in the Middle East that permanently involves Iran poses an upside risk to our outlook."