European and US benchmark prices were up as much as 4% in the immediate aftermath of the attack

This article is more than 8 months old

This article is more than 8 months old

Oil prices surged on Wednesday after an Iranian missile attack on US and coalition military bases in Iraq that sparked fears of all-out war between Iran and America.

European and US benchmark prices were up as much as 4% in the immediate aftermath of the attack, with the price of Brent crude busting through the US$70 mark.

Prices of both Brent and another key benchmark blend, West Texas Intermediate, fell back as markets digested news of the attacks, but remained more than 1% higher than on Tuesday.

The rises added to oil prices already elevated by market jitters over the US assassination of top Iranian general Qassem Suleimani.

Iran attacks two US airbases in Iraq in wake of Suleimani killing Read more

Fears of war have also hit stock markets across Asia, with the Australian exchange falling around 1% during trade on Wednesday before recovering most of its losses after Iranian officials played down the prospect of further attacks on US interests.

The international tensions add to existing economic fears in Australia, which is battling deadly and expensive bushfires that experts say risk making consistently weak consumer spending even worse.

Investors have also poured into traditional safe haven gold, with the price of an exchange-traded fund that tracks the price of the precious metal adding 3% on Wednesday on top of strong increases last week.

Iran launched more than a dozen ballistic missile attacks on air bases in Al Assad and Erbil on Wednesday “in the name of martyr General Qassem Suleimani”, the Islamic Revolutionary Guard Corps said.

On the orders of president Donald Trump, US forces used a drone to assassinate Suleimani near the Baghdad airport on Friday.

Iran's assault on US bases in Iraq might satisfy both sides Read more

While much of the ASX recovered losses on Wednesday afternoon, Australian flag carrier Qantas was down almost 3.4%.

Many Qantas-branded flights are code-shares with Emirates, which is based in Dubai – just across the Persian Gulf from Iran.

The US Federal Aviation Authority has banned American airlines from flying to the region but the ruling does not bind Australian operators.

“Each airline makes its own judgment,” Civil Aviation Safety Authority spokesman Peter Gibson said.

Qantas has been contacted for comment.

Despite the Australian market’s general recovery, the share prices of junior financial groups, including troubled companies AMP and IOOF, and retailers, including JB Hi-Fi and Flight Centre, remained depressed, turning in falls of more than 1.5% as the trading day neared its end.