This archive report was first published on 6 January 2020.
January 6, 2020, marked a tumultuous day in global markets as the news of the American killing of Qassim Suleimani, a powerful Iranian general, sent shockwaves around the world.
The price of Brent oil, the international benchmark, surged above $70 in futures trading, a significant increase from its previous levels. This sudden escalation in tensions in the Middle East, a region that supplies much of the world's petroleum, has had a profound impact on oil markets.
Analysts at Capital Economics have warned that the price of oil could spike to $150 a barrel if the bellicose rhetoric between the two countries turned into action. According to Alexander Kozul-Wright, a commodities economist at Capital Economics, 'The price of oil would soar in the event of full-blown military conflict in the Middle East.'
However, Kozul-Wright also noted that this rally would likely be short-lived as supply networks would adjust and demand would slump in the wake of higher prices.
Stock markets in Asia also felt the impact, with shares falling in financial capitals across the region. In Tokyo, shares fell by more than 2 percent in morning trading, while major stock markets in Hong Kong, Taipei, and Seoul inched down about one percent.
The price of gold, considered a safe haven investment, reached its highest level since April 2013, with the spot price of bullion hitting $1,588.13 an ounce, up more than 2 percent, in early trading before coming down slightly.
