Oil prices rose on Tuesday after Israel launched an air strike on an Iranian embassy in Syria over the weekend.
The strike has raised fears of retaliation by Iran and an escalation in the Middle Eastern conflict that could disrupt oil supply.
Brent oil futures were trading 1.48% higher at $88.71 and WTI rose 1.58% to $85.03.
Iran’s leaders have promised a reaction after a senior Islamic Revolutionary Guard Corp general was among those killed in the attack.
Although Iran has yet to respond, it is widely thought Iran’s military proxies could step up activities across the region.
Oil prices have been subdued since the earlier month of the war on Gaza but have ever so steadily increased in recent weeks in hopes of stronger economic demand and increasing geopolitical tensions.
“An Israeli airstrike on Iran’s embassy in Syria, which has killed Iran’s top commander, has reignited geopolitical tensions, and squeezed the oil price higher in return,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.
“Brent crude is now trading at over $88 a barrel, as concerns over supply spill over into the price. At the same time, there’s little expectation that OPEC’s production policies will loosen, adding further pressure.”
