Oil prices have surged to a nine-month high after turmoil in Iraq threatened the outlook for production.
The spike comes after al Qaida-linked insurgents captured key cities including Mosul – in a region that is considered a gateway for the nation’s crude – and vowed to advance on Baghdad.
Iraq is the second largest producer in the Organisation of the Petroleum Exporting Countries (OPEC). Production has increased by a fifth since 2011 to reach 3.3 million barrels per day.
Brent crude rose to 113.62 US dollars (£66.95), a level not seen since last autumn when unrest in Egypt sparked fears that major supply routes could be choked.
The violence in Iraq has prompted the US to weigh up short-term military options, including air strikes,though officials have ruled out putting troops on the ground.
