Oil was down by more than 7 per cent on Monday after Iran attacked a US military base in Qatar in retaliation for America’s attacks on its nuclear facilities over the weekend.
Brent crude futures depreciated by $5.53 or 7.2 per cent to sell at $71.48 a barrel and the US West Texas Intermediate (WTI) crude futures lost $5.53 or 7.2 per cent to close at $68.51 per barrel.
Iran retaliated against US airstrikes on its main nuclear sites with a missile attack on the Al Udeid airbase in Qatar, the largest US military installation in the Middle East.
No US personnel were killed or injured in the attack, and this quelled the possibility of a swift response from the administration of President Donald Trump.
Traders also decided to sell-off as Iran took no action to disrupt oil and gas tanker traffic through the Strait of Hormuz, which could see global trade disrupted and crude prices surge to $120 per barrel.
Goldman Sachs analysts warned that Brent crude could breach $100 if Iran retaliates by disrupting Hormuz traffic, though current flows remain stable.
There was also no interruption to Qatar’s energy shipments or production after the attack and no other Iranian attack was detected at any US military base other than in Qatar.
Iran had threatened to shut the Strait of Hormuz, a narrow channel off southern Iran that around 20 per cent of global oil supply passes through on its way to refineries worldwide.
Qatar is one of the world’s largest exporters of liquefied natural gas, and all its shipments pass through the strait.
At least two supertankers made U-turns near the strait following the US military strikes on Iran, earlier on Monday,
Iran, the third-largest crude producer under the Organisation of the Petroleum Exporting Countries (OPEC), said the US attack on its nuclear sites expanded the range of legitimate targets for its armed forces.
Also, President Donald Trump on Monday called on US and global oil producers to keep crude prices from spiking, following coordinated airstrikes on Iran’s nuclear facilities.