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Oil Prices Up After Iran Attacks Two U.S.-Iraqi Airbases, Sparking More Conflicts

By Ritu

Capital Sands

Oil prices jumped on Wednesday in Asia after Iran attacked two U.S.-Iraqi airbases in response to a U.S. airstrike that killed a top Iranian general last week, sparking worries of intensifying conflict in the Middle East.

Overnight, the Pentagon said missile strikes were launched from Iran and targeted the Ayn al-Asad base in western Iraq and another facility in Erbil.

U.S. Crude Oil WTI Futures surged 1.3% to $63.53 by 10:27 PM ET (04:27 GMT), while International Brent Oil Futures traded 1.4% higher. Oil prices jumped as much as 5% earlier in the day following the news, but gave up some of their gains later on as Iran’s foreign minister said it had “concluded proportionate measures in self-defense” and is not seeking war.

Supply worries resulting from deepening conflict between the U.S. and Iran were cited as tailwind for oil markets since the beginning of the year as a U.S. airstrike killed general Qassem Soleimani last week. Following the attack, Iran vowed to retaliate and said it was assessing 13 possible ways to inflict a “historic nightmare” on America.

Developments on the Sino-U.S. trade front also remained as focus. The two nations were reportedly going to sign a phase one trade deal on Jan. 15.