Oil prices steadied Wednesday after climbing sharply earlier on concerns about a spiraling tit-for-tat conflict between the United States and Iran.Iran launched more than a dozen ballistic missiles against bases in Iraq that house US troops in retaliation for the American airstrike that killed a top Iranian general last week, sending US crude prices as much as 4% higher.US crude futures later gave up most of those gains to trade about 0.3% at nearly $63 a barrel. Brent crude, a global oil benchmark, was last up 0.6% to almost $68 a barrel.The attacks were Iran’s response to the US killing last week of top Iranian General Qasem Soleimani in Baghdad. Iran has called that attack an “act of war” and “state terrorism” and had vowed a response.”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, director of commodity research at ClipperData.President Donald Trump, who has previously visited one of the airbases targeted, has been briefed on the missile attacks. The Pentagon said it is “working on initial battle damage assessments” and will “take all necessary measures to protect and defend” US personnel and allies in the region.Trump has previously vowed to hit back at Iran if it retaliated for the US drone strike that killed Qasem Soleimani, the head of the Islamic Revolutionary Guard Corps’ Quds Force.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 prices retreated earlier this week on hopes that energy supplies won’t be impacted by the tensions.
The energy minister of the United Arab Emirates said Wednesday that OPEC is ready to respond as tensions rise in the Middle East, saying that no country can afford a return to a situation where crude oil costs $100 per barrel.Suhail Al Mazrouei told CNN Business that the cartel would seek to ensure that ample energy supplies are available.”We will always make sure that we supply the world with whatever it requires,” al Mazrouei said, adding that the United Arab Emirates was building spare capacity in order to avoid shortages.Still, the energy minister cautioned that even OPEC and its allies don’t have unlimited resources. “We have limitations as well,” he said, saying that the group “cannot just replace any quantity” of supply that is taken offline.A spike in oil prices could deal a blow to the world economy, which is already struggling from weak manufacturing activity. Dow (INDU) futures briefly tumbled more than 400 points during Asian trading hours on Wednesday. Dow futures were last down about 50 points.—CNN