Oil prices jumped by about 1% today, pushing Brent above $70 a barrel, as rhetoric from the US, Iran and Iraq fanned tensions in the Middle East after a US air strike killed a top Iranian military commander.
Brent crude futures soared to a high of $70.74 a barrel and was at $69.36 this afternoon, up 76 cents from Friday's settlement.
US West Texas Intermediate crude was up 54 cents at $63.59 a barrel after touching $64.72, its highest since April.
The gains extended Friday's more than 3% advance after a US air strike in Iraq killed Iranian military commander Qassem Soleimani, heightening concerns about an escalation in conflict in the Middle East and the possible impact on oil supplies.
The region accounts for nearly half of the world's oil production, with a fifth of the world's oil shipments passing through the Strait of Hormuz.
US President Donald Trump yesterday threatened to impose sanctions on Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), if US troops were forced to withdraw from the country.
Baghdad earlier called on US and other foreign troops to leave Iraq.
Donald Trump also said that the US would retaliate against Iran if Tehran were to strike back after the killing.
The Economist Intelligence Unit raised its first-quarter projection for Brent by $5 to $70 a barrel, assessing that Iran is likely to want to avoid open conflict.
"We maintain our forecast that the two countries are likely to avoid outright war. Iran is not in a position financially, after more than a year of crippling US sanctions, to finance a lopsided war with the US," EIU global economist Cailin Birch wrote in a note.
In the US, crude stocks fell by their most since June as exports exceeded 4 million barrels per day for the first time in history, the Energy Information Administration said on Friday.
Elsewhere, bad weather shut all four oil export terminals in eastern Libya on Sunday and the closure could last three days, port sources said.