Crude oil prices jump on Middle East fears Oil prices surged on Wednesday morning with US crude leaping to a two-year high as investors prepared for a possible western military strike on Syria. Although Syria is not a major oil producer or transit point, investors fear that western intervention there could spill over into the rest of the region, potentially affecting oil supplies from other producers such as Iraq. Brent crude oil futures, the global benchmark, have leapt 6 per cent in the past two days, on Wednesday hitting a fresh six-month peak of $117.34 a barrel. US West Texas Intermediate rose to $112.24, its highest since May 2011. By late morning, prices had eased somewhat, although both benchmarks were still up more than $1 from Tuesday. "The oil markets have begun to price in the risk of military action," said Michael Wittner, head of global oil research at Société Générale. He predicted that Brent prices would rally to $120-$125 a barrel in the next few days in the event of a strike on Syria, and could rise to $150 if the action leads to greater disruption in the rest of the Middle East. "The concern is that an attack on Syria will reverberate through the region, increasing the spillover into other countries and possibly resulting in a larger supply disruption elsewhere," Mr Wittner said. The concerns about Syria come against a backdrop of tighter crude oil markets than many had anticipated. Iranian exports continue to be reduced by the impact of US sanctions, while strikes and militia activity in Libya have led to a sharp reduction in production there. At the same time, refiners around the world have been boosting runs, leading to a drawdown in stocks in many regions. Syrian oil production itself is insignificant to the global market. The country's output has fallen from 350,000 barrels a day to less than 100,000 b/d in the two years since conflict began - marginal in the context of global oil production of 92m b/d. That has led some to question the market reaction to potential military action in Syria. "We see a clear risk of an overreaction in the current situation, especially if assessments are linked to the Syrian issue," said analysts at JBC Energy, a Vienna-based consultancy. Syria itself is no longer relevant from a supply point of view . . . The risk of an immediate spillover of air strikes into Iraqi or other regional production we see as quite limited.