Oil prices rise as Saudi cuts ties with Iran

Oil prices rose in Asia Monday after crude kingpin producer Saudi Arabia cut diplomatic ties with Iran following a row over the Saudi execution of a Shiite cleric. Saudi Arabia announced the decision Sunday, a day after protesters ransacked its embassy in Tehran over the execution of the cleric, Sheikh Nimr al-Nimr.

Saudi Foreign Minister Adel al-Jubeir said Iranian diplomats had 48 hours to leave. Iran’s supreme leader warned Saudi Arabia it would face “quick consequences” for the execution.

Fearing further upheaval in the already volatile Middle East, the United States has urged regional leaders to try to ease tensions. At around 0610 GMT, US benchmark West Texas Intermediate for delivery in February was up 77 cents, or 2.08 percent, at $37.81. Brent crude for February was trading 91 cents, or 2.44 percent, higher at $38.19.

“Oil started the new year on the mend, as Asian markets reacted to fears that geopolitical tensions in the Middle East may threaten the supply of oil,” said Bernard Aw, market strategist at IG Markets in Singapore.