Oil spikes after Iran strikes US targets in Iraq

World oil prices briefly surged 4.5 per cent on Wednesday after Iran launched missile attacks on US targets in Iraq.

The strikes, launched in retaliation for President Donald Trump ordering the assassination of the Islamic republic's top general last Friday, sent Brent and New York crude to multi-month peaks.

Oil later trimmed gains as Iran said it had "concluded" for now its missile attacks, launched in response to the US drone assassination of Qasem Soleimani last Friday. The unrest has yet to impact oil supplies, analysts said.

"Although the market was duly warned about upcoming Iranian retaliation attacks on US installations and armed forces the (Brent) oil price still spiked up to almost USD 72 per barrel following the Iranian attacks on two US Iraqi bases last night," said SEB analyst Bjarne Schieldrop.

"Again, not a single drop of oil supply has been lost due to the recent incidents and this is why the oil price has fallen back down again so quickly. What the market fears is that the situation spirals out of control, with an uncontrollable escalation leading to outright war."
"Fears of escalation, however, were proven to be short-lived as the US administration avoided an impulsive military response in the aftermath."