Oil prices have risen after the political leader of Hamas was killed in Iran, raising fears about an all-out war in the Middle East.

Brent crude, the international benchmark, rose 1.7pc to nearly $80 a barrel after Hamas said Israel killed Ismail Haniyeh.

US-produced West Texas Intermediate crude was up 1.9pc to more than $76 after the killing, which followed an earlier attack by Israel in Lebanon which killed a senior Hezbollah commander. 

Brent had tumbed 4.5pc over the previous three days to seven-week lows but has bounced back amid concerns that an escalation in the conflict could lead to more attacks on ships travelling through the Red Sea or impact exports from Iran.

Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova, said the attack “obviously strips away the hopes of ceasefire”. 

She said: “Since it happened in Tehran, it’s plausible that it can trigger a wider conflict and we may witness involvement from other countries.”

Read the latest updates below.