Oil prices surged above $71 per barrel following Iran's naval exercises in the Strait of Hormuz and the Sea of Oman.

Crude oil has climbed more than $4 per barrel this week after the Iranian naval forces held two different drill in reaction to the US Navy military buildup, The Caspian Post reports, citing Iranian media.

20% of the 100 million barrels used globally each day passes through the narrow Strait of Hormuz that borders Iran. The IRGS Navy even blocked the strategic waterway for few hours during the drill on Wednesday.

Analysts predict that any military conflict will not be limited but it will last long, sending the oil prices as high as $120 bpd.

Iran and the Russian Federation held a joint naval drill which wrapped up yesterday in northern Indian Ocean and the Sea of Oman.