Oil prices display a significant increase and stock futures have decreased overnight following a US airstrike in Iraq which resulted in the death of Iran’s top general.
The airstrike, approved by Donald Trump resulted in the death of Iranian general, Qassem Soleimani and there are now fears that there will be an immediate retaliation from Iran.
The attack took place at Baghdad’s airport and also resulted in the death of an Iraqi militia’s deputy commander, Abu Mahdi al-Muhandis, in addition to at least five other people.
The Pentagon states that Soleimani “was actively developing plans to attack American diplomats and service members in Iraq and throughout the region.” He was head of Iran’s elite Quds Force and chief of its regional security, as such, his death is expected to be met with a response, causing panic across oil markets.
Iranian-backed militias were said to be responsible for an attack on the US embassy in Baghdad earlier this week and tensions in the Middle East could escalate over the coming weeks.
A rise in tensions could have major repercussions for oil transit in the region, causing this latest spike in prices. The news has also resulted in a drop in equity futures and rise in gold futures.
Stephen Innes, chief Asia market strategist for AxiTrader said: This is an aggressive show of force and an outright provocation that could trigger another Middle East war. Indeed we are waking up to a less safe world than it was only hours ago.”
WTI crude for February delivery has increased by 2.97%, while Brent has recorded a gain of 3.17% - This represents crude’s highest prices since mid-September when a missile attack took place at oil facilities in Saudi Arabia.