Oil prices surged late on Thursday and early Friday after markets reacted to major news in the Middle East. Qassem Soleimani, commander of Iran’s Revolutionary Guard, was killed in a targeted strike by United States forces last night in Baghdad, Iraq. The assassination of a top Iranian general is a huge development as tensions have risen between the U.S. and Iran.
The prospect of further destabilization in the Middle East has the potential to disrupt oil markets. West Texas Intermediate (WTI) was up 3% in late afternoon trading on January 3. Many of the top oil stocks gained in futures trading, but have hit turbulence as the broader market has suffered a pullback.
Shares of Exxon Mobil (NYSE:XOM) were down 0.83% at the time of this writing. Exxon has operations in Iraq. Rising tensions have spurred on U.S. oil workers to begin evacuating the country. There is a high probability that Iran will seek to retaliate after this major move. Encana (TSX:ECA)(NYSE:ECA) stock, on the other hand, was up 1.05% in late afternoon trading.
Tensions have steadily escalated in the Middle East over the course of the last decade, especially since the eruption of the Syrian Civil War. This strike will work to stoke those fires, which means that investors should expect further disruption in the oil-rich region in the months and years to come.