Brent crude oil prices jumped in early June as violence in Iraq - the Organization of the Petroleum Exporting Countries' second largest oil producer - triggered supply disruption concerns. Prices of Brent crude rose around 5 percent from the end of May to around $115 per barrel on June 19, the highest level since last September.
Prices have eased slightly, but at $111 per barrel stand above their January-to-May average of $108.
Over the past few weeks, the al-Qaida-inspired Islamic State of Iraq and the Levant (ISIL) have fed off the chaos of neighboring Syria's civil war to seize control of a large chunk of territory in Iraq, effectively erasing the border between the countries in the process.
"The recent violence in Northern Iraq has raised questions on the potential impact of higher oil prices and an oil supply shock on the Chinese economy," Bank of America Merrill Lynch analysts said in a note published Thursday.