Oil gains trimmed as tensions on Iran strike recede temporarily; crude production facilities remain unaffected in attacks

Tokyo: Oil markets calmed after on Wednesday after prices had jumped to their highest in months in the wake of a rocket attack by Iran on American forces in Iraq that raised the specter of a spiraling conflict and disrupted crude supplies. Prices gave up a large part of their gains after the early surges as analysts said market tension could ease as long as oil production facilities remain unaffected by attacks. Tweets by US President Donald Trump and Iran’s foreign minister also appeared to signal a period of calm - for now. Brent crude futures were up 97 cents, or 1.4 percent, to $69.24, after earlier rising to $71.75, the highest since mid-September 2019. [caption id=“attachment_2574814” align=“alignleft” width=“380”] Representational image. AFP.[/caption] West Texas Intermediate crude futures climbed 82 cents, or 1.3 percent, to $63.52 a barrel. It earlier reached a high of $65.85, the most since late April last year. Iran’s missile attack on US-led forces in Iraq came early on Wednesday, hours after the funeral of Qassem Soleimani, the commander of the country’s elite Quds Force killed in a US drone strike on 3 January. Tehran fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting US-led coalition personnel, the US military said on Tuesday. Stock, currency and gold markets were also roiled by the attacks. Trump said in a tweet that an assessment of casualties and damage from the strikes was underway and that he would make a statement on Wednesday morning US time. “All is well!” Trump said in the Twitter post. Analysts said oil markets remained focused for now on the precise nature of the targets in the attack. “The reality remains that there have been no reports of oil supply disruptions and these attacks were aimed at military installations in Iraq,” said Victor Shum, vice president of energy consulting at IHS Markit in Singapore. “So no immediate impact on oil supply but risks have certainly increased and the oil market is in a wait-and-see (mode) to see if this escalates further and if there is any collateral damage affecting oil supply,” Shum said, adding the world is well supplied with oil at the moment. Iranian news agency Mehr said Iran’s Islamic Revolutionary Guard Corps had targeted the base. Tehran had vowed retaliation for the killing of military commander Soleimani. The missiles hit their intended US targets in Iraq on Wednesday, Iran’s English-language Press TV quoted an unnamed source as saying. “Iran took and concluded proportionate measures in self-defense,” Iranian Foreign Minister Jawad Zarif said on Twitter. “We do not seek escalation or war, but will defend ourselves against any aggression,” he added. Meanwhile, news of a jet crash in Tehran didn’t disturb the return to calmer trading. Iran’s official news agency IRNA reported a Ukrainian airliner with at least 170 people on board crashed on Wednesday due to technical problems soon after taking off from Tehran’s Imam Khomeini airport.