Oil Prices Hike After Iranian general killed by US

Oil prices hike tremendously after the killing of a top Iranian general in Iraq. The price of Brent crude increased by more than 3% and reason for $69.50 a barrel. This is highest from September 2019. Analyst already warned the result of killing will affect to global oil production.

Reason behind hike is General Qasem Soleimani killed in a US drone strike at Baghdad airport. The Pentagon described as “defensive action”. Oil Prices Hike pushed oil stocks on the London stock exchange higher, with BP up 2.7% and Royal Dutch Shell nearly 1.9% higher.

United States oil companies shares like Exxon Mobil dropped. However, US market fall prompted by weak manufacturing data and concerns about the implications of the Middle East conflict.

The Dow and the Nasdaq closed down about 0.8%, while the S&P 500 dropped by 0.7%. The declines followed record highs a day earlier.

“2020 opened on a very positive note,” said Aneeka Gupta of WisdomTree Investments. “This event has actually stalled the bullish optimism we’ve seen.”

Tensions between the US and Iran

Tensions between the US and Iran have been rising since 2018. When the US pulled out of a nuclear deal meant to curb Iran’s nuclear programme and prevent the country from developing nuclear weapons.

The United States also re-imposed sanctions on Iran, a move that has shattered the country’s economy and severely restricted its oil exports.

This recent strike has sparked fears of increased risk to energy supplies in the region. The price of the international benchmark, Brent Crude, climbed 3.5% on Friday, while US oil – known as West Texas Intermediate – increased about 3%.

That rise is somewhat muted, suggesting that investors expect the reaction to the killing will be contained, said Adnan Mazarei, senior fellow at the Peterson Institute for International Economics and former deputy director for the Middle East at the International Monetary Fund.

Read more https://www.bbc.com/news/business-50982313

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