Oil climbs as Iran launches strike on US troops, market uneasy

Oil prices peaked in months after Iran attacked American troops on US bases in Iraq on the early hours of Wednesday. The missile attack was Iran’s response to the killing of its major general Qasem Soleimani, sparking a growing conflict and sending oil supplies into turmoil.

But oil prices cooled down after the initial heat as financial analysts said that tension in the market could stabilize if oil facilities remain unaffected by the tension in the middle east.

Brent crude futures climbed 2.3%, or $1.56, priced at $69.83 per barrel at 0207 GMT. West Texas Intermediate crude futures rose 2%, or $1.25, priced at $63.95 per barrel.

Iran launched the missile attack on US forces in Iraq at 1:20 am, only a few hours after the funeral of its killed general Soleimani, who was the commander of elite Quds Force in Iran. Soleimani was killed on Jan. 3 in a drone strike by the US.

Tehran launched more than a dozen ballistic missiles aimed at two Iraqi military bases where US troops camped.

“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,” analyst Hideshi Matsunaga of Sunward Trading in Tokyo said.

“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,” he added.

Mehr, an Iranian news agency, said that the missile attacks were fired by Iran’s Islamic Revolutionary Guard Corps. After the killing of Soleimani, Iran has vowed retaliation against the US.

Iraqi broadcaster al Mayadeen said that sirens resounded as American helicopters circulated around the area of the Ain al-Asad air base early Wednesday.

“We are working on initial battle damage assessments,” spokesman Jonathan Hoffman of the Pentagon said, adding that the bases attacked were Al-asad air base and another in Erbil, Iraq.