Hamas is preparing its military forces for a possible resurgence in hostilities with Israel as the cease-fire is set to lapse this weekend. Reports indicate that Hamas’ armed wing has appointed new commanders and is strategising the positioning of fighters.

Efforts are ongoing to maintain the cease-fire, with mediators actively involved. In addition, Hamas has initiated repairs on its underground tunnel network and is providing training materials to new fighters for guerrilla warfare tactics against Israel.

Attention from markets is likely to focus on oil due to the potential for price increases amid these developments.

Traders will need to consider the effects of these developments on oil markets. Geopolitical risks often drive fluctuations in energy prices, and tensions between Israel and Hamas have historically influenced supply concerns. If the cease-fire collapses, the likelihood of increased instability in the broader region could prompt volatility in crude futures.

Washington has already expressed concerns over the situation, urging restraint from both sides while working with regional partners to prevent escalation. However, past conflicts indicate that if violence resumes, the impact may not be isolated. With the Middle East being a key producer in global energy markets, even the perception of disruption can push prices upward.

Brent crude has already displayed sensitivity to geopolitical shifts this year. If supply chains are threatened, even indirectly, traders holding short positions in crude could face difficulty. We recall previous conflicts having swift effects on energy markets, requiring positioning adjustments in response. As such, anticipating potential surges—before confirmation of actual disruptions—tends to be a recurring theme during these periods.

Beyond energy, defence-related equities may see increased interest. We remember how previous escalations led to heightened investor attention on firms rooted in security and aerospace industries. If exchanges react similarly this time, some may look for opportunities in stocks tied to military technology and defence contracts, given expectations that governments in the region could raise procurement levels.

While discussions continue in diplomatic circles, those involved should be aware of how sentiment can shift quickly. Reactionary price movements can follow headlines rather than concrete changes on the ground. Observers may find it valuable to monitor updates from policymakers, as any remarks related to de-escalation or intervention could influence short-term trends.