Prices of oil and oil-backed securities surged in Korea due to heightened tensions in the Middle East after the killing of Iran’s top commander in a U.S. drone strike, though experts saw the repercussions to be contained amid strong U.S. oil output growth.

The international benchmark Brent crude climbed 3.55 percent to close Friday at $68.6 per barrel, with the Dubai crude also up 3.65 percent at $67.83. By comparison, U.S. West Texas Intermediate gains stopped short at 0.19 percent to finish at $63.05.

Pentagon confirmed Thursday night that the U.S. military took a “decisive defensive action to protect U.S. personnel abroad” by killing General Qasem Soleimani, a key figure of Iranian and Middle Eastern politics, in Baghdad under the directive of President Donald Trump. The attack exacerbated the already fraught relations between the United States and Iran and raised the risk of retaliation that could disrupt energy production in the region.

Iran announced Sunday that it would roll back its commitments to the 2015 nuclear agreement with the U.S. and other global powers, declaring that it would no longer abide by the limitations on enriching uranium.

Prices of crude oil exchange-traded products soared on the news.

Mirae Asset Daewoo’s TIGER WTI Futures, an exchange-traded fund that tracks the performance of the S&P GSCI Crude Oil Enhanced Index, rose 2.81 percent Friday from the previous session. Shinhan Investment’s Shinhan Brent futures, an exchange traded-note tied to the Dow Jones Commodity Index Brent Crude TR, jumped 2.94 percent. Mirae Asset Crude Oil Futures ETN, which tracks the S&P GSCI All Crude Index TR Index, was up 2.77 percent.

The jump was higher for leveraged ETNs. Samsung Securities’ Samsung Leverage WTI Crude Oil Future ETN 31, which corresponds to the S&P Crude Oil 2X Leveraged TR Index, shot up 6.08 percent. Mirae Asset Leveraged Crude Oil Futures ETN(H), which tracks the S&P GSCI 2X Leveraged All Crude TR Index, also rose 5.83 percent.

“While oil prices may rise in the short term, this upward trend is not expected to last as the U.S. can fill in the gap even if there are production cuts from Iran,” said Kim Yoo-mi, analyst at Kiwoom Securities.

By Moon Ga-young and Kim Hyo-jin

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