Oil prices surge over fears of fresh Middle East conflict

Oil prices jumped more than 4 percent on Friday after senior Iranian and Iraqi military personnel were killed in a United States air raid near Baghdad Airport, raising concerns that escalating Middle East tensions may disrupt oil supplies.

Brent crude futures were up by nearly $3 at $69.16 per barrel, their highest since September 17, as markets feared Iran could retaliate against the killing of its top militiamen by attacking assets of the US and their allies in the Middle East.

US West Texas Intermediate (WTI) crude futures rose $1.76, or 2.9 percent, to $62.94 a barrel. Earlier, it touched $63.84 a barrel, its highest since May 1.

“Certainly Iran is going to retaliate in some way – retaliations will come, as they have in the past, in what we call an asymmetrical way. They’re not going to confront the US directly but they will perhaps attack Saudi tankers again, maybe Saudi oil refineries again,” John Tirman, executive director at the Massachusetts Institute of Technology Center for International Studies, told Al Jazeera.

“The supply-side risks remain elevated in the Middle East and we could see tensions continue to elevate between the US and Iran-backed militia in Iraq,” Edward Moya, analyst at brokerage OANDA, told Reuters via email.

The US attack happened after an Iran-backed militia and other protesters breached the US embassy in Baghdad on New Year’s Eve.

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