The decision comes amid heightened tensions between the U.S. and Iran as nuclear talks appear to have stalled.

The price of oil initially increased more than 4% when news of the US evacuation broke, in anticipation of regional insecurity potentially leading to supply problems. Around 2,500 US troops are based in Iraq, according to the defence department.

The move comes after the Iranian defense minister warned that Tehran would target U.S. bases in the area if tensions escalated.