Oil Prices Jump as US Assassination of Soleimani Fuels War Fears

By Staff, Agencies

World oil prices jumped on Friday after the US assassinated Commander of the Islamic Revolution Guard Corps Lieutenant General Qassem Soleimani, fanning fresh fears of conflict in the crude-rich Middle East, with Tehran warning of "severe" retaliation.

Soleimani was martyred in an attack on Baghdad's international airport early Friday.

Later, US President Donald Trump tweeted a picture of the American flag and the Pentagon said he had ordered Soleimani's assassination.

Brent oil surged 4.5 percent in the London morning and WTI jumped 4.1 percent as traders fretted over the dramatic escalation in tensions, although prices dropped back before the European close.

Major oil firms saw their shares gain ground, BP adding 2.75 percent to 494.05 pence while Royal Dutch Shell B shares rose 2.13 percent to 2,306.50 pence.

Cailin Birch, global economist at The Economist Intelligence Unit, said the market feared a "broader conflict".

"The importance stems less from the potential loss of Iranian oil supplies... and more from the risk that this could spark a broader conflict that draws in Iraq, Saudi Arabia and others," she told US media.

"There is also a significant risk that Iran could launch a targeted attack on US ships in the region, which could disrupt seaborne crude oil flows and cause prices to rise further."

Prices saw record gains in September after attacks on two Saudi Arabian facilities briefly slashed output in the world's top oil exporter by half.