Prices of Brent crude in the international market breached US$50 a barrel, following the air strikes in Yemen by Saudi Arabia. The initial increase on Thursday was more than 5 percent.

The rise in prices was caused by fears that the conflict could spread as the military operations targeted the Houthi rebels who drove away the Yemeni president from the capital city of Sanaa, reports BNN. The air strikes actually have not disrupted oil plants of major Gulf producers.

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Prices for Brent futures LCOc1 reached a high of US$59.78 per barrel before it settled to US$58.17 by 1031 EDT.

Jordan Perry, senior analyst of risk consultancy Verisk Maplecroft, said the conflict is over Saudi concerns about having an Iranian ally in its backyard. He notes that the surge in crude oil prices over the last 24 hours is an overreaction.

However, Perry concedes: "Houti takeover in Yemen does have significant geopolitical repercussions in that it adds to Iran's growing regional clout."

On Wednesday, U.S. President Barack Obama decided to directly aid the offensive against Tikrit to recapture the Iraqi city, in effect seizing the initiative from Iran which took a major role in directing the operation.

The Americans stayed on the sidelines for three weeks in the battle for Tikrit since Washington had second thoughts about aiding a basically Iran-led operations. However Iranian Prime Minister Haider al-Abadi requested for U.S. assistance on the condition that the Shiite militias backed by the Iranian government would step aside and let the latter play a bigger role.

By taking the lead, it is a chance for the U.S. and an Iraqi force of 30,000 to beat the smaller force of the Islamic State (IS), and at the same time gain edge over Iran.

Lt. Gen. James Terry, commander of the operation against the IS, said in a statement, "These strikes are intended to destroy ISIL strongholds with precision, thereby saving innocent Iraqi lives while minimizing collateral damage to infrastructures."