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The price of oil has spiked and stocks sold-off after a US airstrike killed a top Iranian general, fuelling fears of conflict in the region.
The US Department of Defence said in a statement released early on Friday morning that it had killed the head of the Islamic Revolutionary Guard’s elite Quds Forces in an airstrike.
The US military said the strike on Qasem Soleimani was ordered directly by US President Donald Trump.
The Department of Defence said Soleimani was behind the recent attacks on the US embassy in Baghdad and said the “strike was aimed at deterring future Iranian attack plans.” It labelled Soleimani’s unit terrorists.
“The United States will continue to take all necessary action to protect our people and our interests wherever they are around the world,” the US government said.
Iranian leader Ayatollah Ali Khamenei said there would be “revenge” for the strike, according to Iranian news service Fars, and declared a period of mourning for Soleimani’s death.
“Though Suleimani may be unknown by many in the West, some political analysts have likened him to a US vice president in terms of profile, while he has previously been described as the ‘single most powerful operative in the Middle East’,” said Connor Campbell, a financial analyst at trading platform SpreadEx.
“Important to bear in mind when considering the kind of response that could be expected from Iran (a nation, remember, that has major ties to Russia and China).”
Oil prices spiked on Friday in response to the news, as traders weighed the possibility of disruption to supply from the region. Crude (CL=Z) was up 2.8% to $62.91 per barrel and Brent (BZ=F) was up 3% to $68.25 per barrel.
Traders also sold off stocks, which tend to rise as an asset class when investor risk appetite is high and fall when people are wary. The FTSE 100 (^FTSE) was down 0.4% in early trade, Germany’s DAX (^GDAXI) fell by 0.9%, and the CAC 40 (^FCHI) in France dropped by 0.5%.
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