Oil rose sharply, with US crude rising nearly $3, on Wednesday after the US said its forces in Iraq were attacked by Iranian ballistic missiles, raising the prospect of a regional conflagration that could cut oil supplies.
West Texas Intermediate crude futures CLc1 rose nearly $3, or almost 5%, to $65.50 a barrel at around 0029 GMT. Brent crude was yet to trade after dropping nearly 1% on Tuesday.
Iran has launched an attack on US-led forces in Iraq, the US military said on Tuesday, adding Tehran fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting US-led coalition personnel.
"We are working on initial battle damage assessments," Pentagon spokesman Jonathan Hoffman said in statement, adding that the bases targeted were at Al-Asad air base and another in Erbil, Iraq.
Iranian news agency Mehr said Iran's Islamic Revolutionary Guard Corps had targeted the base. Tehran has vowed retaliation for the killing of Iranian military commander Qassem Soleimani by a US air strike on Jan. 3.
Sirens were heard and American helicopters were seen flying over Iraq's Ain al-Asad air base in Anbar province early on Wednesday, according to al Mayadeen TV.