Oil prices surge after US strike kills Iranian general

Oil prices soared more than four per cent Friday following news that the US had killed a top Iranian general, fanning fresh fears of a conflict in the crude-rich region.

The head of Iran's Quds Force, Qasem Soleimani, was hit in an attack on Baghdad's international airport early Friday, according to Hased, a powerful Iraqi paramilitary force linked to Tehran.

Later, Donald Trump tweeted a picture of the American flag, and the Pentagon said he had ordered Soleimani's killing.

Brent surged 4.4 per cent to USD 69.16 and WTI jumped 4.3 per cent to USD 63.84 as investors grow increasingly worried about the effects of a possible flare-up in the tinderbox Middle East on supplies of the commodity.

Both contracts later pared the gains but remained well up.

"This is more than just bloodying Iran's nose," said AxiTrader's Stephen Innes.

"This is an aggressive show of force and an outright provocation that could trigger another Middle East war."