Crude futures near $70/b as tensions rise after US airstrike kills Iranian general

London — Crude oil futures remained elevated through the morning trading in Europe on Friday, with the market factoring in heightened geopolitical tension following a US airstrike in Iraq which killed a leading Iranian general.

At 1039 GMT the front-month ICE Brent March crude futures was trading at $69.26/b, up more than 4% from Thursday's settle of $66.25/b, while the front-month NYMEX February light sweet crude futures contract was $2.67/b higher at $63.87/b.

Front-month Brent crude has not settled above the $70/b level since May 22 last year.

Iran has vowed to respond to the attack, in which the leader of the Iranian Revolutionary Guard's foreign wing, General Qassim Soleimani, was killed, raising the risk of serious disruption to the region's oil industry.

"This is a seismic event in the region," Jason Bordoff, director of the Center on Global Energy Policy at Columbia University, tweeted Thursday. "Abqaiq was just the beginning," he added, referring to the attacks on key Saudi infrastructure last September.

Saxo Bank commodity strategist Ole Hansen had a similar take on the situation. "The US strike against Iran's top two signals a worrying increase in the tensions between the two nations. Crude oil has responded as it should with the risk of supply disruptions driving the price higher," he said.

The killing of Soleimani is another chapter in the Trump administration's maximum pressure campaign against Iran, which includes sweeping sanctions that saw the Islamic republic's oil exports drop below 500,000 b/d in the second half of last year from more than 1.7 million b/d in March.

Aside from, geopolitical tensions in the Middle East, the market will also be looking for direction from US Energy Information Administration stocks data scheduled for release later Friday.

On Tuesday, the American Petroleum Institute reported a draw of 7.8 million barrels from US stocks for the week ended December 27, against analysts' expectations of a 3.1 million barrels draw according to a Platts survey.

--Seth Clare, seth.clare@spglobal.com

--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com