Oil jumped close to $70 a barrel after a U.S. airstrike ordered by President Donald Trump killed a top Iranian general in Iraq, intensifying fears of conflict in the world’s most important crude-producing region.
In a turbulent start to the trading day marked by unusually heavy volumes, futures in London and New York surged by more than 4% to levels not seen since the attacks on Saudi Arabia’s oil production in September. The strike near Baghdad airport killed Qassem Soleimani, the Iranian general who led the Revolutionary Guards’ Quds force, according to a Defense Department statement.
While no oil installations or production were impacted, the killing of one of Iran’s most powerful generals is a provocation that ratchets up tension between Washington and Tehran, heightening fears of an armed confrontation that could pull in other countries. As focus shifts to how Iran will react, the country’s supreme leader, Ayatollah Ali Khamenei, vowed that “severe retaliation” awaits the killers of Soleimani, according to a statement.
Tensions have been building between Washington and Tehran after an Iran-backed Iraqi militia stormed the American embassy in Baghdad to protest deadly U.S. airstrikes earlier this week. Saudi Arabia’s energy facilities as well as foreign tankers in and around the Persian Gulf have been the target of several attacks over the past year — a region that includes OPEC’s five biggest producers.