The price of Brent crude soared to more than $69 a barrel in the aftermath of America's hit on Iranian general Qasem Soleimani as American oil workers vacated the Middle East.
Prices shot up by more than 4% to their highest in almost four months amid fears of turmoil affecting the Arabian Gulf from which around a fifth of the world's oil is shipped. Iraq's Oil Ministry confirmed some US citizens working for foreign oil companies were leaving the city of Basra.
A backlash is predicted in Iraq, where Soleimani, leader of the Revolutionary Guards' Quds Brigade, commanded the support of shia militias. The leader of an Iraqi militia was killed along with him in a drone strike in Iraq early on Friday. A leader of the Iran-funded Hezbollah in Lebanon was also reported to have been killed.
Iran has vowed to avenge the killing of Soleimani. Iraqi prime minister Adel Abdul Mahdi condemned attack as a violation of the conditions of the US military presence in Iraq and a breach of Iraq's sovereignty, and said it would lead to war.
Iraq's oil ministry said all oilfields across the country were operating normally and production and exports had not been was not affected. There were spikes in the price of oil last year at the time of attacks on Saudi tankers in the Gulf of Oman, the seizing of European tankers by the Revolutionary Guards and the attack on a Saudi refinery.
Yields on US Treasuries and government bond yields across the euro area fell as investors sought out safe havens.
