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- Oil prices spiked Wednesday morning after Iran launched a missile attack on two military bases in Iraq housing US troops — but then quickly fell back down.
- The price of Brent crude climbed 4% to $71.75 a barrel and then fell to about $68 a barrel. West Texas Intermediate climbed 4.7% to $65.65 a barrel and then fell to roughly $62.
- Prices made their reversal when a fuller picture of the incident became clear. A US statement said the attack caused no casualties, and President Donald Trump tweeted that “all is well.” In addition, the event didn’t damage any energy infrastructure.
- Watch Brent crude and West Texas Intermediate crude trade live on Markets Insider.
Oil spiked and then slipped Wednesday morning, tracking the concern that followed an Iranian missile attack on Iraqi military bases and the subsequent relief that it didn’t cause any deaths or damage any energy infrastructure.
In the early hours Wednesday morning, Iran launched ballistic missiles at two bases hosting US and Iraqi personnel in what appeared to be retaliation for the US killing last week of Iranian Maj. Gen. Qassem Soleimani.
The price of oil surged as much as 5% shortly after the missile attack, but it fell later in the morning when the US announced the attack didn’t cause any deaths and President Donald Trump tweeted that “all is well.”
The price of Brent crude climbed 4% to $71.75 a barrel, a three-month high, shortly after the news of the attack. It later fell to about $68 a barrel. West Texas Intermediate crude climbed 4.7% to $65.65 early Wednesday, its highest level since April, but fell about 1% to roughly $62 a barrel after the US statement.
Oil has been volatile as recent escalating tensions in the Middle East sparked worry that regional crude supplies could be disrupted. Those worries were somewhat abated by the US statement and by a response from the Organization of the Petroleum Exporting Countries.
“We are not forecasting a shortage of supply unless we have a catastrophic escalation, which we don’t see,” the United Arab Emirates’ energy minister, Suhail al-Mazrouei, told Reuters from Abu Dhabi early Wednesday.
He also said he saw no imminent risk to oil passing through the Strait of Hormuz, a key gateway for the commodity.
Still, oil prices are highly sensitive to any developments in the region, and volatility could continue, according to Lukman Otunuga, an analyst at FXTM.
“It will be interesting to see how far geopolitical shocks support oil prices before investors re-direct their focus back towards US-China trade and global growth,” he told Markets Insider in an email.
