Oil prices jumped to their highest in months on Wednesday after Iran attacked US Troops in Iraq in response to a US strike that killed an Iranian general last week, raising the specter of a spiraling conflict and disrupted oil supplies.
But prices cooled a fraction after the early heat as analysts said market tension could ease as long as oil production facilities remain unaffected by attacks.
Brent crude futures rose $1.56, or 2.3%, to $69.83 by around 0207 GMT, after earlier rising to $71.75, the highest since mid-September 2019.
West Texas Intermediate crude futures climbed $1.25, or 2%, to $63.95 a barrel. It earlier reached a high of $65.85, the most since late April last year.
Iran’s missile attack on US-led forces in Iraq came early on Wednesday, hours after the funeral of Qassem Soleimani, the commander of the country’s elite Quds Force killed in a US drone stroke on January 3.
Tehran fired more than 12 ballistic missiles from Iranian territory against at least two Iraqi military bases hosting US-led coalition personnel, the US military said on Tuesday.
Hideshi Matsunaga, analyst at Sunward Trading in Tokyo said, “It’s getting really serious … but there is a feeling of achievement in terms of technical charts as Brent has surged to above $70/barrel and near a high in September, 2019 after attacks on Saudi Arabian oil sites.”
He added, “We have to see how much and what damage the latest attacks have caused, but oil markets may come down, just like last September, if we can confirm that oil facilities have not been affected.”