Iran launched a missile attack on a US military base in Jordan, sending oil prices sharply higher and reversing a weeks-long decline. The strike, which hit the base near the Syrian border, marks a significant escalation in regional tensions.
The Attack
The missiles struck the US base in eastern Jordan early Thursday, local time. No group immediately claimed responsibility, but Iranian state media confirmed the attack, calling it a response to recent Israeli operations in Syria. The US military said it was assessing damage and casualties.
Oil Markets React
Crude prices had been falling for several weeks on expectations of increased global supply and slowing demand. But the attack halted that slide. Brent crude jumped more than 3% in early trading, while West Texas Intermediate rose by a similar margin. The move erased losses from the previous two sessions.
The price reversal was sharp and immediate. Traders cited the risk of supply disruptions from the Strait of Hormuz, through which about a fifth of the world's oil passes. Iran has threatened to block the strait in past confrontations.
What's at Stake
Jordan hosts about 3,000 US troops as part of the international coalition fighting ISIS. The attack on a base there is a direct challenge to US military presence in the region. It also comes as the US and Iran have been engaged in indirect talks over Iran's nuclear program.
The Biden administration has not yet announced a response. Any US retaliation could further destabilize oil markets, which were already on edge due to the war in Ukraine and OPEC+ production cuts.
For now, the oil market is pricing in a higher risk premium. The attack reversed a decline that had brought Brent below $80 a barrel for the first time in months. It now sits above $82.
