<div>Oil prices rose in Asia on Friday (8 August) after US President Barack Obama said he had authorised air strikes against Sunni extremist militants in key crude producer Iraq.<br /><br />US benchmark West Texas Intermediate for September delivery rose 35 cents to USD 97.69 while Brent for September gained 67 cents to USD 106.11 in mid-morning trade.<br /><br />Obama in an address yesterday said he ordered the air strikes to prevent "genocide" by the so-called Islamic State fighters against the besieged Yazidi minority in Iraq's north.<br /><br />"I therefore authorized targeted air strikes if necessary to help forces in Iraq as they fight to break the siege and protect the civilians trapped there," Obama said.<br /><br />He did not say whether air strikes have already been carried out.<br /><br />Desmond Chua, market analyst at CMC Markets in Singapore, said the development could add "significant risk premium to oil prices" as dealers worry about potential supply disruptions.<br /><br />"The announcement certainly edges up the geopolitical concerns about Iraq and the Middle East region, and comes as a bit of a surprise to investors," Chua told AFP.<br /><br />Islamic State insurgents now control large swathes of Iraq's north and west. The sweeping offensive that began on June 9, preventing Baghdad from exporting oil via a pipeline to Turkey and by road to Jordan.<br /><br />Iraq's oil ministry on July 24 said crude exports totalled 2.42 million barrels per day in June, falling far short of a budgeted projection of 3.4 million bpd.<br /><br />As the number-two producer in the OPEC cartel, Iraq's 11 per cent of proven world reserves plays a key role on world markets and prices after violence disrupted oil exports from Syria and Libya.<br /><br />The dip in exports adds to the woes of Iraq, which is heavily dependent on oil revenues while spending more on military equipment to battle the Islamic State group. <br /><br />(Agencies)</div>
