Oil surges after Iran attacks US forces in Iraq

Oil surges after Iran attacks US forces in Iraq

Representative image.

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 killed an Iranian general last week, raising the spectre of a spiralling conflict and disrupted oil supplies.

Brent crude futures soared $1.83, or 2.7%, to $70.10 by around 0148 GMT, after earlier rising to $71.75, the highest since mid-September 2019.

West Texas Intermediate crude futures climbed nearly $2, or almost 3%, to $64.30 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 in the early hours of Wednesday, hours after the funeral of Qassem Soleimani, the commander of the country's elite Quds Force killed in a U.S. drone strike 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.

"The obvious concern for markets, is where does this all end?", ING Research analysts said in a note.

"The worry is that we could see more from Iran, provoking U.S. retaliation - a scenario that cannot be ruled out given the warnings from President (Donald) Trump," it said.

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.

Sirens were heard and American helicopters were seen flying over Iraq's Ain al-Asad airbase in Anbar province early on Wednesday, according to Iraqi broadcaster al Mayadeen.

"We are working on initial battle damage assessments," Pentagon spokesman Jonathan Hoffman said in a statement, adding that the bases targeted were at Al-Asad airbase and another in Erbil, Iraq.

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