Assassination of Iranian General Spark Oil Price Surge

Iranian General, Qasem Soleimani, was killed in a US airstrike near Baghdad International Airport yesterday.

It is believed that Soleimani’s assassination was carried out in retaliation against Iran-backed militias, who attacked the U.S Embassy in Baghdad on New Year’s Eve. According to TIME magazine, Soleimani, who led a special forces unit of Iran’s elite Revolutionary Guards, was killed along with Abu Mahdi al-Muhandis, the Deputy Commander of Iran-backed militias.

The assassination of General Soleimani further increased tension that already existed between Washington and Tehran, the capital of Iran. Although no oil productions or facilities were damaged or impacted by the airstrike, oil prices increased. The increase comes after fear arose that the recent attacks may spark retaliation by Iran that could cause an attack on U.S assets. There are also concerns that these attacks may disrupt oil supplies in the Middle East.

Oil prices surged by 4% this morning, with Brent Crude increasing by 4.4% at $69.16, almost $3 higher, per barrel. This is the highest oil price surge since the attack on two Saudi Arabian facilities in September, which cut the production of oil in Saudi, the world’s top exporter, by almost 50%.

According to the Chief Market Strategist at AxiTrader Ltd., Stephen Innes, “This is an aggressive show of force and an outright provocation that could trigger another Middle East war.” It is uncertain whether the Iranian government has any plans to retaliate against the U.S.