Oil prices have risen after ballistic missiles struck two bases housing U.S. troops in Iraq.
In the midst of Asian trading, Brent crude fell by 1.4 percent to $69.21 a barrel, easing from earlier gains. Also on the news, safe haven properties grew such as gold and the Japanese yen.
At the same time, global stock prices have been decreased due to concerns about the rising Middle East conflict. Japan’s Nikkei 225 stock index fell by 1.3 percent, while Hang Seng fell by 0.8 percent in Hong Kong.
Iranian state television said the attack was a revenge for the assassination of top commander Qassem Soleimani of Iran. The attack took place following Soleimani’s funeral service, who was killed on Friday by a U.S. drone strike.
His death raised questions about the potential for further escalation of the conflict between the US and Iran.
That could interrupt shipping on the busiest oil shipping route in the world – the Hormuz Strait. About one-fifth of the global supply of oil passes through the strait connecting the Gulf to the Arab Sea.
The Hormuz Strait is important to the Gulf region’s major oil exporters – Saudi Arabia, Iraq, the UAE, and Kuwait – the economies of which center around oil and gas production.
Qatar, the biggest liquefied natural gas (LNG) producer in the world, exports almost all of its gas through the strait.
The U.S. Aviation Regulator banned American airlines from flying over Iraq, Iran, and neighboring countries following the latest attacks. The ban covers the Gulf of Oman and Saudi Arabia’s oceans.
The FAA said the decision was a response to increased military activity and increased political tension in the region.
Before the latest orders, the FAA had already prohibited US airlines from flying below 26,000 feet (7,925 metres) over Iraq and from flying over an area of Iranian airspace above the Gulf of Oman since Iran shot down an American drone in June 2019. Simultaneously, Singapore Airlines said all of its flights would now be detracted from the airspace of Iran.