Tensions between Israel and Hezbollah continue to escalate. Hezbollah rocket and drone attacks on northern Israel have forced tens of thousands of people to evacuate their homes. Should war erupt, its effects could reverberate through the energy market.

What happens in southern Lebanon will not stay in southern Lebanon. Iran would likely come to Hezbollah’s aid even more vociferously than it did Hamas. After all, Hezbollah is Shi’ite, the Islamic Republic’s original proxy, and its insurance policy against an Israeli attack on the regime’s nuclear program. Tehran also values Hezbollah’s strategic geography astride both Israel and the Mediterranean Sea.