Oil prices jump 3% on rising tensions between Saudi Arabia, Iran

Oil prices jumped as much as 3% on rising tensions in the Middle East. The global oil benchmark Brent futures gained as much as 3.3% to $38.50 per barrel, the highest in about three weeks.

Oil prices jumped as Saudi Arabia's execution of a prominent Shi'ite Muslim cleric on the weekend spurred regional anger and geopolitical tensions in the Middle East. Riyadh cut ties with Iran after protesters stormed the Saudi embassy in Tehran.

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In the first few hours of trading in 2016 oil prices had jumped by over 2% with rising tensions in the middle-east, raising supply concerns from the oil-producing country.

US crude's West Texas Intermediate (WTI) futures were up by 2.05%, or 76 cents at $37.80 a barrel, according to a Reuters report.

Despite the rise in oil prices, it is still down by two-thirds since mid-2014 due to the oversupply in the market.

Iran's oil exports have declined by around 1 million barrels per day (bpd) from 3 million bpd at its peak in 2011, prior to sanctions.