LONDON — The price of oil surged Friday as global investors were gripped with uncertainty over the potential repercussions after the United States killed a top Iranian general.
News that Gen. Qassem Soleimani, head of Iran’s elite Quds Force, was killed in an air strike at the Baghdad international airport prompted expectations of Iranian retaliation against US and Israeli targets.
In previous flare-ups in tensions with the US, Iran has threatened the supply of oil that travels from the Persian Gulf to the rest of the world. About 20 percent of oil traded worldwide goes through the Strait of Hormuz, where the shipping lane is only 3 kilometers (2 miles) wide and tankers have come under attack this year.
The international benchmark for crude oil jumped 4.1%, or $2.70, to $68.95 a barrel in London trading.
“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.
In September, Yemen’s Iran-backed Houthi rebels launched drone attacks on the world’s largest oil processing facility in Saudi Arabia. The strike briefly took out about half of the supplies from the world’s largest oil exporter. The US directly blamed Iran, which denied any involvement.
Launching attacks that can’t be easily linked back to Iran limits the chances of direct retaliation.
But Iran has also directly targeted tankers. This year it seized a British-flagged tanker, the Stena Impero, for several weeks. And it has shot down a US military drone.
About 80% of the crude oil that goes through the Strait of Hormuz goes to countries in Asia, including China, Japan, India and South Korea.
But the rise in the global price of oil will affect other countries more widely, particularly oil-importing countries with big manufacturing sectors like Germany and Italy.
European stocks fell at the open on Friday, with investors rattled after the US strike.
In initial trade, London’s benchmark FTSE 100 index of major blue-chip companies reversed 0.3 percent to 7,578.79 points.
In the eurozone, Frankfurt’s DAX 30 index slipped 0.9 percent 13,267.38 points and the Paris CAC 40 shed 0.6 percent to 6,014.18 compared with the close on Thursday.
Hong Kong stocks also ended down.