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%CrudeOil prices have risen more than 3% on reports that Hamas political leader Ismail Haniyeh has been assassinated in Iran, raising the prospect of a regional war in the Middle East.

West Texas Intermediate (WTI) crude oil, the U.S. standard, is up 4% and trading at nearly $78 U.S. a barrel.

Brent crude oil, the international benchmark, is up 3% and trading at $80.75 U.S. a barrel following reports of the political assassination that took place in Tehran.

Iran’s government is accusing Israel of assassinating Haniyeh. Iran’s leader, Ayatollah Ali Khamenei, said it is Iran’s duty to punish Israel for the killing, raising the likelihood of all out war in the oil-rich Middle East.

The assassination of Haniyeh throws into doubt potential cease-fire talks that have been ongoing between Israel and Hamas. Haniyeh was a senior negotiator in those negotiations.

Until now, oil markets have largely taken in stride the escalating violence in the Middle East with little impact on prices. However, that could now change as the conflict shifts into a wider war.

The assassination comes as the influential OPEC+ oil cartel prepares to meet on August 1 and assess current production quotas.

There’s speculation that OPEC+ may adjust its output strategy for the remainder of this year and heading into 2025.

Until now, the biggest impact on crude oil prices has been demand in China, the world’s largest importer of energy products.

An accelerating economic slump and weakening industrial output in China had dampened crude oil prices, pushing them down to a two-month low in recent days.