Oil prices on Monday dropped after Brent crude jumped close to $70 per barrel after an Iranian military chief was killed in a military operation conducted by the United States.
Brent crude futures prices are used as benchmarks for future oil prices in Africa, Europe and the Middle East.
Reuters reports that prices pared gains during the session on growing doubts that Iran would strike back in a way that would disrupt oil supplies.
On Monday, Brent crude futures LCOc1 settled at $68.91 a barrel, up 31 cents, after soaring to a high of $70.74 a barrel from Friday’s settlement.
U.S. West Texas Intermediate CLc1 crude was up 22 cents at $63.27 a barrel after hitting $64.72, its highest since April.
“There seems to be an emerging dialogue along the lines that it’s not in the Iranians’ interest to lash out and attack oil infrastructure,”
“Because any attack on the oil infrastructure would most likely rally the barrel and that would, in turn, most likely shut down Iranian exports.” Reuters quoted the director of futures at Mizuho in New York, Bob Yawger, as saying.
Oil prices jumped 2.9 per cent to $68.16 per barrel during Asian trading hours on Friday, after an Iranian military chief, Qassem Soleimani, was killed by an American airstrike ordered by President Donald Trump on Thursday near Baghdad International Airport in Iraq.
The middle east accounts for nearly half of the world’s oil production, with a fifth of global oil shipments passing through the Strait of Hormuz.
The United States said Mr Soleimani was killed to avenge both his past deadly attacks against Americans and forestall future assaults.
Iran dismissed America’s explanation as an afterthought and vowed to go after American interests across the world.
There were widespread protests following Muslim prayers on Friday in Tehran and other Middle East cities.