Oil prices spike after US assassinates Iranian military leader

Soldiers hold a portrait of Iranian commander Qasem Soleimani.
Soldiers hold a portrait of Iranian commander Qasem Soleimani.
Image: Reuters/Thaier Al-Sudani
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America’s assassination of Iranian security commander Qasem Soleimani today caused the third Iran-linked spike in oil prices in the space of a year.

Brent crude prices climbed as much as 4.6%, to $69.30 per barrel, their highest point since May 2019, after the US announced it would end waivers to sanctions on Iranian oil imports. In September, Iran-backed Houthi rebels claimed responsibility for a drone attack on the world’s biggest oil refinery, in Saudi Arabia, which pushed prices to just over $69 a barrel.

Soleimani, who was seen as one of the most powerful men in Iran, was killed by a US drone strike at Baghdad airport, sparking fears that further violence could follow between Washington and Tehran. Iranian supreme leader Ayatollah Ali Khamenei called for three days of national mourning and warned of retaliation. “A forceful revenge awaits the criminals who have his blood and the blood of the other martyrs last night on their hands,” he said in a statement.

The Pentagon said president Donald Trump ordered the attack in response to intelligence indicating that Soleimani was planning an attack on US diplomats in the Middle East.

Gold touched a four-month high, government bonds rallied, and global stocks fell on news of the drone strike. S&P 500 futures were down 1.4% at the time of writing, suggesting US stocks would open lower after a strong start to the year yesterday.