Oil prices jumped more than $3 on Friday after a U.S. airstrike in Baghdad ordered by President Donald Trump killed the head of Iran’s elite Quds Force, sparking concerns for an escalation of regional tensions and disruption to crude supplies, Reuters reports.
Brent crude rose to a peak of $69.50 a barrel, its highest since mid-September when Saudi oil facilities were attacked and was up 3.7% or $2.43 a barrel at $68.68.
West Texas Intermediate (WTI) crude was up $2.17 or 3.5% at $63.35 a barrel, having earlier spiked to $64.09 a barrel, its highest since April 2019.
An airstrike 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,” political risk consultancy Eurasia Group’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 U.S. embassy in Baghdad on Friday urged all citizens to depart Iraq immediately.
Dozens of U.S. citizens working for foreign oil companies in the Iraqi oil city of Basra were preparing to leave the country on Friday, company sources told Reuters.
All oilfields across the country were operating normally and production and exports were not affected, Iraq’s Oil Ministry said in a statement. It said no other nationalities were departing.
“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.
Soleimani’s Quds Force and its paramilitary proxies in Iraq, Lebanon, and Yemen have ample means to mount a multi-pronged response.
In September U.S. officials blamed Iran for a missile and drone attack on oil installations of Saudi Aramco, the Saudi state energy giant and world’s largest oil exporter.
The Trump administration did not respond beyond heated rhetoric and threats.