Brent crude oil hit a nine-month high to touch $115 a barrel on Friday, forcing the US to swiftly react to Iraq developments saying military action would be initated against the Islamist groups in Iraq.
The new price of brent crude at $115 is the highest since September. The sudden surge in price was almost $3 high in 24 hours.
However, the International Energy Agency (IEA) said the possible loss of oil exports from Iraq will be negligible. “Concerning as the latest events in Iraq may be, they might not for now, if the conflict does not spread further, put additional Iraqi oil supplies immediately at risk,” IEA said.
The IEA said on Friday that OPEC would need to produce one million barrels per day (bpd) extra to meet the demand in the second half of 2014 as estimated demand for OPEC crude oil in the second half of this year is up by 150,000 bpd from its forecast last month to an average of 30.9 million bpd.
Iraq developments, however, leave analysts worry for the oil prices which are elastic to any unrest in the Arab oil-producing countries, especially Iraq and Iran.