Oil prices continued to rise on Friday in Asia upon the impact of the escalation of violence in Iraq, and the jihadists' crawl towards Baghdad.
The price of light sweet crude oil is at its highest since September 18, 2013, with an increase of 73 cents to $107.26, while the price of Brent North Sea crude oil increased by 57 cents to $113.59 per barrel.
"Any disruption at [Organisation of the Petroleum Exporting Countries] OPEC's second largest producer risks tearing apart the global rebound we had seen this year," Desmond Chua, market analyst at CMC Markets in Singapore, said.
Phillip Futures warned that "higher energy prices will apply brakes on a global recovery and may even cause the world to re-enter recession."
Fighters of the Islamic State in Iraq and the Levant (ISIS) launched an offensive which seized large swathes of territory in northern Iraq and laid their control on Iraq's second city of Mosul on Tuesday as well as Tikrit, and arrived less than 100 kilometres away from Baghdad.
US President Barack Obama said yesterday that his team is considering "all options" regarding the escalation of violence in Iraq and the progress of the armed Islamist extremists heading in the direction of the capital, while urging lawmakers to allow air strikes.
At the conclusion of a closed-door meeting, the UN Security Council members condemned the acts of terror taking place in Iraq, calling on all Iraqi factions to start national dialogue urgently.
Iraq currently produces 3.33 million barrels of oil per day, according to the OPEC, making it the second largest producer after Saudi Arabia.