Oil prices jumped to their highest in months on Wednesday after Iran attacked American forces in Iraq in response to a U.S. strike that assassinated 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 U.S.-led forces in Iraq came early on Wednesday, hours after the funeral of Qassem Soleimani, the commander of the country’s elite Quds Force assassinated in a U.S. drone stroke on Jan. 3.
Tehran fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting U.S.-led coalition personnel, the U.S. military said on Tuesday.
Iranian news agency Mehr said Iran’s Islamic Revolutionary Guard Corps had targeted the base. Tehran has vowed retaliation for the killing of military commander Soleimani.