Oil prices stabilized on Wednesday after rising sharply earlier, amid fears of an escalation of the conflict between the United States and Iran.
Iran launched more than a dozen ballistic missiles at bases in Iraq that include American forces in response to the American air strike that killed a prominent Iranian general last week, which led to a 4% rise in US crude oil prices.
US crude futures later gave up most of these gains, trading around 0.3% at around $63 a barrel. Brent crude, a global oil index, rose 0.6% to nearly $68 a barrel.
These attacks were an Iranian response to the killing of the United States last week by Major General Qasem Soleimani in Baghdad. Iran called the attack “an act of war” and “state terrorism” and vowed to retaliate.
” It comes as no surprise that there has been a reprisal from Iran — the concern is that this is just the sign of things to come,” said Matt Smith, commodity research director at ClipperData.
President Donald Trump, who had previously visited a targeted air base, was informed of the missile attacks. The Pentagon said it is “working on preliminary assessments of the battle damage” and “will” take all necessary measures to protect and defend US personnel and allies in the region.
Trump had earlier pledged to respond to Iran if it retaliated against an American drone raid that killed Qasim Soleimani, commander of the Islamic Revolutionary Guard Corps.
Investors are on high alert for any signs of a clash between the United States and Iran that threatens oil supplies in the Middle East. Crude oil prices fell earlier this week in the hope that energy supplies will not be affected by tensions.
The Minister of Energy of the United Arab Emirates said on Wednesday that OPEC is ready to respond with the escalation of tensions in the Middle East, saying that no country can afford a return to a situation in which crude oil costs $100 a barrel.
UAE Energy Minister Suhail Al Mazroui said that OPEC will strive to ensure the availability of a lot of energy supplies. ” We will always make sure that we supply the world with whatever it requires,” Al Mazroui said, adding that the United Arab Emirates is building spare capacity to avoid shortages.
High oil prices could strike the global economy, which is already struggling with weak industrial activity. Dow Jones futures fell more than 400 points during Asian trading hours on Wednesday. Dow Jones futures were down about 50 points.