The price of oil has jumped after the execution of a prominent Shi’te Muslim cleric in Saudi Arabia sparked outrage and escalated tension in the region.

The execution of Sheikh Nimr al-Nimrhas been condemned by Iran, with Riyadh cutting ties with Tehran after protestors stormed the Saudi embassy. Nimr was executed for terrorism on Friday, an act described as a ‘grave mistake’ by the Supreme Islamic Shia Council in Lebanon, with warnings that it would have repercussions which could bring down the Saudi Royal family.

The price of oil jumped on the back of the events, with the Global benchmark Brent futures LCOc1, which fell 35 percent last year due to fear of over-supply in a global slowdown, gaining 3.3 percent to its highest in three weeks.

However, the market will continue to remain under pressure from excess supply with OPEC failing to cap output, exacerbated by an influx of oil from Tehran once restrictions are lifted later this year.

Still, many think the market will remain under pressure as producers including the Organisation of the Petroleum Exporting Countries (OPEC), Russia and the United States pump between 0.5-2.0 million barrels of oil every day in excess of demand.

Previous articleChinese markets suspended after 7 percent drop
Next articleCreditor agreement sends Bagir Group up 20 percent