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How the Oil Market Learned to Live With a Middle East in Flames

Syrian demonstrators burn the U.S. flag as they gather to mourn and condemn the death of Iranian military commander Qasem Soleimani, and nine others in an American air strike.

Photographer: AFP via Getty Images

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A dramatic U.S. drone strike kills Iran’s most important general. Tehran vows retribution and oil prices jump almost 5% as traders rush to cover the risk of a Middle East war. Then the selling starts.

It’s a trading pattern that would have been unthinkable a decade ago, but has become increasingly familiar. The threat of conflict loomed over the heart of the global oil market this past week, but the usual panic buying by traders and consumers was met quickly by a wave of U.S. shale drillers grasping the opportunity to lock in prices for future production.