Global Markets Witness Oil Price Hike after Qasem Soleimani’s Death

Qasem Soleimani

The US’ recent drone airstrike that killed the Iranian general, Qasem Soleimani, has returned the fears of war-like situations in both the countries. At a time, when the US opposition leaders were considering the possibility of retaliation from Iran, the oil prices rose by almost four percent.

The news of rise in oil prices came after the Pentagon conducted a surgical airstrike, in which Qasem Soleimani, the head of Iran’s elite Quds Force, and Abu Mahdi al-Muhandis, the deputy commander of Iran-backed militias known as the Popular Mobilisation Forces, were killed.

When viewed from a regional perspective, it appears that Soleimani’s death is somehow related to the growing oil prices, which could have an adverse impact on the global market.

A 3.7 percent hike was noted in the London-traded Brent and a 3.6 percent hike in New York-traded West Texas Intermediate, as both traded at $68.67 per barrel and $63.35 per barrel respectively. If the similar situations continue, there could be a possible war for crude oil extraction and production in future.

There is no telling to what extent would the oil prices remain affected, if the US-Iran feud continued in the same manner.

Iran, being a powerful Middle Eastern country, has a greater influence over other countries in the region. By developing a sovereign capability to conduct warfare through third parties, Iran has made strategic ties with its regional partners, easing its way out of a variety of complex relationships throughout the Middle East.

The US has always condemned Iran and its growing influence, calling it a huge threat to the Middle-Eastern peace. If Iran retaliates over Qasem Soleimani’s death, it would give way to the US’ long stated threats against the country.

Moreover, first step of Iran’s revenge over losing its influential militia commander and his advisor, has been clearly inflicted through the growth in oil prices. The move would further slowdown the process of oil supplies to global market.

The analysts believe that the oil prices could further rise depending on Iran’s response. If it attempts to block the Strait of Hormuz, oil rates would further escalate, resulting in an armed conflict between both the US and Iran.

Iran’s Supreme Leader Ayatollah Ali Khamenei has vowed “harsh revenge” for the US military’s airstrikes. What if this harsh revenge is directed towards Iran exercising its full influence in the Middle Eastern region? Considering its case, Iran could demand a full withdrawal of the US troops from other Middle Eastern countries by exerting maximum pressure.

There is also a possibility that Iran could order its militia present in other countries to attack and kill the US forces. It can also take help from Yemeni Houthis, its allies, to attack and inflict serious damages on some sensitive Saudi oil installations so as to cripple Saudi oil exports.

Any of the above stated reasons would straightforwardly bring a surge in oil prices, exploiting the oil market.

No one would have thought that the vulnerabilities of Qasem Soleimani’s death would become such a challenging situation to overcome. But here it is, with all the possible outcomes of what happens if the US and Iran opt for a war.  

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