The price of Brent crude spiked on Friday over concerns about the ongoing insurgency in Iraq.
Oil prices settled down, but at $4 per barrel higher than at the beginning of the week.
Reassurances about the flow of oil supplies went some way to calming market jitters.
Brent crude futures stabilised at $112.32 per barrel, while US crude levelled to $106.55, after the highest reading for both since September.
Insurgents have taken over two Iraqi cities, prompting the US to say it was considering “all options” to help Iraq.
Iraq is the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) group.
According to figures from the International Energy Agency (IEA), Iraq accounts for roughly 4% of global oil production.
Nevertheless, the IEA, which was set up to deal with crises in oil supply, on Friday said: “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.”
The IEA reassurances came after OPEC said on Thursday that extra production should be more than sufficient to meet growing demand.
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