Oil settles down 7% after Iran attacks US military base in Qatar, not tankers

Oil prices settled down more than 7% on Monday, losing more than $5 a barrel after Iran took no action to disrupt oil and gas tanker traffic through the Strait of Hormuz, but instead attacked a U.S. military base in Qatar in retaliation for U.S. attacks on its nuclear facilities.

Brent crude futures closed down $5.53, or 7.2%, at $71.48 a barrel, while U.S. West Texas Intermediate crude (WTI) eased $5.53, or 7.2%, to $68.51.

Brent's 7.2% drop was the steepest since August 2022. The benchmark traded in a $10 range, the widest since July 2022.

Both benchmarks were down nearly 9% in after-hours trading.

"Oil flows for now aren't the primary target and are likely not to be impacted, I think it's going to be military retaliation on U.S. bases and/or trying to hit more of the Israeli civilian targets," said John Kilduff, a partner at Again Capital.

Oil fell sharply after Iran retaliated against U.S. airstrikes on its main nuclear sites with a missile attack on the Al Udeid U.S. airbase in Qatar, the largest U.S. military installation in the Middle East. No U.S. personnel were killed or injured in Iran's attack, two U.S. officials told Reuters.

In early trade in Asia, Brent rose almost 6% as investors worried the Iranian retaliation would involve disrupting oil exports from the Middle East Gulf. Iran has threatened to shut the Strait of Hormuz, a narrow channel off southern Iran that around a fifth of global oil supply passes through on its way to refineries worldwide.