Oil jumped after separate attacks by Iran-backed militants that killed US troops in Jordan and hit a tanker in the Red Sea, a marked escalation of tensions in the region key to energy production and global trade.
The US said Iranian-backed militants killed three service members and wounded 25 others in a drone attack near the Syrian border, the first American deaths under enemy attack since Israel and Hamas went to war. That followed a Houthi militant missile strike on a tanker operated on behalf of Trafigura Group carrying a cargo of Russian fuel on Friday.
Brent crude rose as much as 1.5% at the start of trading in Asia before paring some gains. The global benchmark capped its biggest weekly gain since October on Friday. West Texas Intermediate climbed toward $79 a barrel.
"Geopolitical risk has rapidly evolved into geopolitical reality," said Michael Tran, an analyst at RBC Capital Markets. "While global oil prices have yet to fully reflect the escalating tensions in the Red Sea, the events of the weekend are likely to catalyze a rebasing of expected outcomes for both the security of supply as well as for oil prices."
The attacks in Jordan escalate US-Iranian tension and prompted calls by some Republic lawmakers for President Joe Biden to launch strikes on Iran. The strike on the tanker carrying Russian-origin fuel is the most significant to date on an oil-carrying vessel.
Up until the past weekend, shippers had assumed the safe passage of vessels linked to Russia and China after earlier assurances by Houthi militants, who mostly targeted ships linked to Israel, US and UK.