Oil prices added to gains on Monday, with the benchmarks for crude touching their highest levels in at least 7 months in the wake of Friday’s killing of Iranian Gen. Qassem Soleimani in a U.S. drone strike, which has ratcheted up Middle East tensions.
West Texas Intermediate crude for February delivery
was last up 58 cents, or 0.9%, at $63.90 a barrel, hanging around the highest level since late April, according to FactSet data.
March Brent crude
was adding 67 cents, or 1%, at $69.26 a barrel, after briefly touching a high at $70.74, hanging around its highest level since around May.
President Donald Trump on Sunday threatened potentially “disproportionate” attacks if Iran strikes back against U.S. targets. On Sunday night, Trump threatened harsh sanctions against Iraq if it expels U.S. troops, and doubled down on earlier comments threatening to target Iranian cultural sites if Iran were to strike back against the U.S.
Shares of Aramco, Saudi Arabia’s national oil company, tumbled 1.7% Sunday to their lowest levels since the company’s massive initial public offering late last year.
“Iran’s response to the killing of their top commander could lead to a military conflict in a key oil-producing region,” wrote Edward Moya, senior market analyst at Oanda, in a research brief.
“We could possibly see some disruption in the Strait of Hormuz, which in 2018 handled 21 million barrels of crude a day, well over 20% of the world’s oil transits,” he said.