World oil prices jumped nearly $3 on Friday after the US killed a top Iranian general, fanning fresh fears of conflict in the crude-rich Middle East, with Tehran warning of “severe” retaliation.
The international oil benchmark, Brent crude, hit $69.16 per barrel, its highest since September 17, 2019 before easing to $68.81 per barrel as of 8:30pm Nigerian time.
The US West Texas Intermediate surged by $2.03 to $63.21 per barrel, having earlier spiked to $63.84 a barrel, its highest since May 1, according to CNBC.
An air strike at the Baghdad Airport early on Friday killed Major-General Qassem Soleimani, the architect of Iran’s spreading military influence in the Middle East and a hero among many Iranians and Shi’ites in the region.
Iran’s Supreme Leader Ayatollah Ali Khamenei said harsh revenge awaited the “criminals” who killed Soleimani.
“We expect moderate to low level clashes to last for at least a month and likely be confined to Iraq,” Eurasia’s Iran analyst, Henry Rome said.
“Iran will also likely resume harassment of commercial shipping in the Gulf and may launch military exercises to temporarily disrupt shipping,” he said.
The United States embassy in Baghdad urged on Friday all citizens to depart Iraq immediately due to heightened tensions.
“With further escalation remaining a distinct possibility, we could see markets retain at least some risk premium,” JBC Energy, an oil and gas research firm said in a note.