Last week, oil prices jumped after the killing of the Iranian General by the US. Brent crude oil increased by more than 3%, hitting $69.50 per barrel, the highest it has been since September.
Commentators have warned that the potential disruption to the global oil market from conflict in the Gulf is severe.
A fifth of global supplies pass through the Strait of Hormuz, a narrow passage bordered in part by Iran.
According to a report by the BBC, some of the biggest producers – Saudi Arabia, Iraq, Kuwait, Iran, UAE and Qatar – would be affected if the Strait could not be safely navigated. Saudi and the UAE have pipelines that bypass the Strait but they do not have the capacity to take all the oil.
“Previous episodes of Middle East conflict have seen higher oil prices which contributed to global economic slowdowns, from the mid-1970s to the early 1990s.”