Oil prices jump on fears of Iranian retaliation against US

LONDON (AP) — The price of oil surged Friday on concerns that Iran might respond to the killing of its top general by the United States by disrupting global supplies of energy from the Mideast.

If sustained, the rise in oil prices could lead to more expensive car fuel, heating and electricity bills, stifling the global economy at a time when it is already slowing.

News that General Qassem Soleimani, head of Iran’s elite Quds Force, was killed in an air attack at the Baghdad international airport prompted expectations of Iranian retaliation.

During past flare-ups in relations with the US, Iran threatened the supply of oil that travels from the Persian Gulf to the rest of the world.

About 20% of crude traded worldwide goes through the Strait of Hormuz, where the shipping lane is only two miles wide and tankers have come under attack this year.

The international benchmark for crude oil jumped 3.7%, or $2.45, to $68.70 a barrel in London trading.

The US contract was up 3.6%, or $2.18, to $63.36.

“Revenge will come, maybe not overnight, but it will come and until then we need to increase the geopolitical risk premium,” said Olivier Jakob, head of consultancy Petromatrix, in a note to investors.

He noted that Iran’s response may not be limited to the Strait of Hormuz.

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