Soleimani Strike Isn’t Business as Usual for Oil
The market’s measured reaction to the Iranian’s death belies escalating risks.
A man holds a picture of Iran's supreme leader Ayatollah Ali Khamenei with Iranian Revolutionary Guards Major General Qassem Soleimani (L) during a demonstration in Tehran against the killing of the top commander in a strike in Baghdad.
Photographer: ATTA KENARE/AFP/Getty Images
Few outside of Iran will weep at the violent demise of Qassem Soleimani. The oil market, never sentimental, joined those cheering the sudden end of the leader of the Quds Force of the Islamic Revolutionary Guard Corps, albeit for different reasons. Will its peculiar brand of excitement last?
One possible clue is the market’s reaction to another major escalation: September’s attack on Saudi Arabia’s Abqaiq oil-processing facility. Brent spiked 15% the next trading day, only to fall below its pre-attack level within about two weeks. Friday’s reaction to Soleimani’s assassination was more muted, and Brent is now below where it closed last week. Having absorbed one game-changing attack that didn’t change the game a few months ago, the oil market appears to think this latest one fits that mold, too.