Brent oil futures fell today from a four-month peak hit in frenzied early trading after a rocket attack by Iran on US forces in Iraq appeared to have no impact on oil infrastructure or crude flows.
Tweets by US President Donald Trump and Iran's foreign minister also seemed to signal a period of calm - for now.
Analysts said oil markets remained focused on the targets in today's attack being military, rather than oil industry facilities.
Brent crude futures were down 60 cents, or 0.88%, at $67.67 this afternoon, after falling by over $1. In early trade, the contract hit its highest since mid-September at $71.75.
West Texas Intermediate crude futures were down 92 cents, or 1.47%, at $61.78 a barrel, after also falling over $1. The futures earlier hit $65.85, the highest since late April.
"The Iranian missile strike overnight did not have a negative impact on the region's oil supply, so those that covered early in the morning may have re-instated their short positions, or those who went long started to liquidate," Tamas Varga of PVM Oil Associates said.
Iran's missile attack on US-led forces in Iraq came early today, hours after the funeral of Qassem Soleimani, the commander of the country's elite Quds Force killed in a US drone stroke on January 3.
Tehran fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting US-led coalition personnel, the US military said.
Stock, currency and gold markets were also roiled by the attacks.
Early indications suggested no US casualties, one source told Reuters, although other officials declined to comment.
Iranian state television said 80 "American terrorists" had been killed and US helicopters and military equipment damaged.
Iraq, Germany, Denmark and Norway said none of their troops were killed or injured.
Saudi Arabia's state tanker operator Bahri temporarily suspended transits through the Strait of Hormuz, the Wall Street Journal reported.
In a research note, Goldman Sachs maintained its three-month view for US oil at $63 a barrel.
"The recent rally in oil prices is unsustainable without actual supply disruption," the bank said.
The Organization of the Petroleum Exporting Countries will respond to any possible oil shortages if necessary, but it also has "limitations", the United Arab Emirates energy minister said today.
Suhail al-Mazrouei said he sees no immediate risk of supplies through the Strait of Hormuz being blocked.