Brent crude has extended gains to cross the $70 per barrel mark after U.S. air strikes in Iraq killed a top Iranian military official, sending Middle East tensions soaring.
After Friday’s air strike on Baghdad airport, worries about supply disruption have risen - oil surged from $66.25 per barrel to close at $68.60 on the same but has extended gains in early Monday trading.
Iran has promised retaliation for the killing of Major General Qassem Soleimani, leader of the elite Quds force and one of Iran’s most influential figures, triggering anti-US protests across the region. The strikes also killed Iraqi militia commander Abu Mahdi al-Muhandis, who was with Soleimani.
U.S. President Donald Trump on Sunday threatened “major retaliation” against Iran if they were to retaliate for the killing. In the fallout, Iran has pulled out of the nuclear pact that was meant to regulate uranium enrichment.
In Baghdad, protestors tried to break into the U.S. embassy over the weekend and later, rockets landed near the building. Late on Sunday, Iraqi parliament voted to oust U.S. troops from within its borders.
The Middle East accounts for nearly half of the world’s oil production, while Iraq is the second largest producer among the Organization of the Petroleum Exporting Countries (OPEC).