Iran rocket strike on US forces jolts markets; Nifty, Sensex dive
Oil prices jumped to their highest in months on Wednesday after Iran attacked American forces in Iraq in response to a US strike that killed an Iranian general last week, raising the spectre of a spiralling conflict and disrupted oil supplies.
But prices cooled a fraction after the early heat as analysts said market tension could ease as long as oil production facilities remain unaffected by attacks.
Brent crude futures rose $1.56, or 2.3%, to $69.83 by around 0207 GMT, after earlier rising to $71.75, the highest since mid-September 2019. West Texas Intermediate crude futures climbed $1.25, or 2%, to $63.95 a barrel. It earlier reached a high of $65.85, the most since late April last year.
"It's getting really serious ... but there is a feeling of achievement in terms of technical charts as Brent has surged to above $70/barrel and near a high in September, 2019 after attacks on Saudi Arabian oil sites," said Hideshi Matsunaga, analyst at Sunward Trading in Tokyo.
"We have to see how much and what damage the latest attacks have caused, but oil markets may come down, just like last September, if we can confirm that oil facilities have not been affected," he said.
Indian stocks also sank and the rupee weakened on Wednesday in the aftermath of a retaliatory attack on US-led forces by Iran.
Other Asian shares and US Treasury yields also tumbled while gold shot higher after Iran fired missiles at Iraqi facilities hosting US-led coalition personnel, in retaliation for the US strike killing an Iranian commander last week.
India imports much of its crude from the Middle East, and its markets are sensitive to swings in prices, which have rallied this week on fears of a disruption to oil supplies.