The price of oil jumps for fear of Iranian reprisals against the United States
LONDON: The price of oil rose on Friday when global investors were affected by uncertainty about the possible repercussions after the United States killed Iran's top general.
The news that Qassem Soleimani, head of the elite Quds Force of Iran, died in an air raid at Baghdad's international airport, raised expectations of Iranian reprisals against US and Israeli targets.
In previous episodes of tensions with the United States, Iran has threatened the supply of oil that travels from the Persian Gulf to the rest of the world.
Around 20 percent of the oil sold worldwide passes through the Strait of Hormuz, where the shipping route is only 3 kilometers (2 miles) wide and the tankers have been attacked this year.
The international benchmark for crude oil rose 4.1 percent, or $ 2.70, to $ 68.95 per barrel in London trade.
Revenge will come, maybe not overnight, but it will come and until then we need to increase the geopolitical risk premium, said Olivier Jakob, Petromatrix consulting chief, in a note to investors.
He noted that Iran's response may not be limited to the Strait of Hormuz.
In September, Iran-backed Houthi rebels from Yemen launched drone attacks at the world's largest oil processing facility in Saudi Arabia.
The strike briefly withdrew approximately half of the world's largest oil exporter supplies.
The United States directly blamed Iran, which denied any participation.
Launching attacks that cannot be easily linked to Iran limits the chances of direct reprisals.
But Iran has also addressed oil tankers directly. This year he seized a British flag tanker, Stena Impero, for several weeks. And shot down an American military drone.
About 80 percent of the crude oil that passes through the Strait of Hormuz goes to countries in Asia, including China, Japan, India and South Korea.
But the increase in the global price of oil will affect other countries more widely, particularly oil-importing countries with large manufacturing sectors such as Germany and Italy.
Those countries fared worse in the stock market on Friday, with their main indexes falling 1.4 percent and 1.1 percent respectively.