Oil prices rose above $ 70 today when the fall-out of the American drone strike in which a top Iranian general was killed created fear of a war in the Middle East.
Brent crude futures, considered a global benchmark, have risen more than six percent since Qassem Soleimani was murdered in Iraq on Friday.
The price climbed two percent when trading resumed Monday and peaked at $ 70.74 a barrel.
The Middle East accounts for nearly half of the world’s oil production, while one-fifth of the world’s oil shipments pass the Strait of Hormuz.
Oil prices rose above $ 70 today when the fall-out of the American drone attack killing a top Iranian general raised fear of a war in the Middle East
Iran has vowed to take revenge on US interests in the region, including potentially intimidating ships in the Strait of Hormuz.
Experts have warned before that a crisis in the critical street could endanger the world’s oil supply.
To increase global tension, Iran announced yesterday that it was leaving all its nuclear borders under the 2015 deal with Western powers.
Moreover, the Iraqi parliament demanded the departure of US troops from the country due to the spread of the attack.
The crisis has shocked investors who were in an upbeat mood when China and the US are preparing to sign their mini-trade deal next week.
The price for crude Brent rose above $ 70 for the first time since September, when attacks on two Saudi oil facilities disrupted the production of the world’s largest producer.
Soleimani (photo) was killed on Friday in an American drone attack near Baghdad airport, shocking the Islamic republic and provoking tensions in the Middle East
“The situation creates a lot of uncertainty and geopolitical tea leaves in response. Although the closure of the Strait of Hormuz remains a very unlikely event, the deterioration in Iraq poses supply risks, “said Norbert Rucker, chief economist at Swiss bank Julius Baer.
“Geopolitics is usually a temporary factor in the oil markets and we think this time is no different. We are increasing our short-term forecast to $ 65 per barrel and maintaining a neutral picture.
Safe-haven assets that were popular in times of turmoil were also on the rise, with gold at highlights not seen since mid-2013.
The Japanese yen also reached a high point in three months against the dollar.
Markets in the Gulf Cooperation Council (GCC) have achieved a sharp decline, with some fear of Iranian revenge attacks on US assets or troops.
Some GCC members, including Kuwait, Qatar and Bahrain, are home to major US military bases, while there are also hundreds of troops in Saudi Arabia.
Soleimani was killed on Friday in an American drone attack near Baghdad airport, shocking the Islamic republic and tensions in the Middle East.
Mourning: Thousands of people gathered in Tehran for the second day of Qassem Soleimani’s funeral after being killed in an American drone attack on Friday
Esmail Qaani, who succeeded Soleimani as commander of the powerful Quds Force of the Revolutionary Quards, swore revenge in a state television interview broadcast today.
“God the Almighty has promised to take revenge and God is the chief avenger. Actions will certainly be taken, “he said.
“We promise that with the help of God, we will resolutely continue the path of martyr Soleimani, and in exchange for his martyrdom we will remove America from the region.”
On Friday, Iran’s top leader, Ayatollah Ali Khamenei, promised “serious revenge” when he declared three days of mourning.
Today, the tearing Ayatollah prayed over the remains of Soleimani, while hundreds of thousands of mourners gathered in Tehran for the second day of his funeral.
Soleimani’s daughter Zeinap immediately threatened with an attack on American troops in the region and spoke to the howling crowd that caught their eye.
“The families of American soldiers in the Middle East will spend their days waiting for the death of their children,” she said to cheers.
Warning for a “dark day” looming before the United States, she said, “Crazy Trump, don’t think everything is over with my father’s martyrdom.”