Gen. Qassem Soleimani, the architect of Tehran’s overseas military operations, was killed early on Jan. 3 in a U.S. drone strike on his convoy at Baghdad’s airport.
Markets responded quickly, with Saudi credit default swaps—which investors buy as protection against default—rising by more than 13 percent on Jan. 3, Refinitiv data showed.
On Jan. 5, shares of oil giant Saudi Aramco fell 1.7 percent to their lowest level since listing last month in a record initial public offering (IPO).
The Kuwaiti index, the best performer in the region in 2019, fell almost 4.1 percent, while Saudi stocks plunged 2.2 percent.
“A U.S.–Iran war could shave 0.5 percentage points or more off global GDP, mainly due to a collapse in Iran’s economy, but also due to the impact from a surge in oil prices,” Jason Tuvey, senior emerging markets economist at Capital Economics, said in a note last week.
Oil prices jumped to $63.05 a barrel on Jan. 3, their highest level in more than three months, after Soleimani’s killing sparked fears that conflict in the region could disrupt global oil supplies.
‘Circle of Violence’
The killing of Soleimani came following months of attacks by Iran-backed militias on U.S. forces in Iraq.
The hostilities that targeted U.S. troops included the storming of the U.S. Embassy in Baghdad by Iranian-backed militiamen and their supporters on Dec. 31, 2019, and the death of a U.S. military contractor in a rocket attack a few days earlier. Several U.S. and Iraqi soldiers were also wounded in the attack, which the United States has attributed to Kata’ib Hezbollah.
According to State Department officials, the killing of Soleimani was in response to the years of deadly attacks that he had personally orchestrated in the region. They stressed that another major attack in Iraq had been imminent, but it’s now not likely to happen.
“We cannot promise that we have broken the circle of violence,” a senior State Department official told reporters on Jan. 3. “What I can say from my experience with Qassem Soleimani is, it is less likely that we will see this now than it was before, and if we do see an increase in violence, it probably will not be as devilishly ingenious.”
President Donald Trump told reporters in Florida that afternoon that the strike was carried out “to stop a war.”
Trump Issues Warning
Trump took to Twitter to announce that the United States has “targeted 52 Iranian sites” in response to threats from the Iranian regime. On Dec. 4, Trump warned Iran not to attack “any Americans or American assets” or Iranian targets would be “hit very fast and very hard.”
Earlier in the day, senior Revolutionary Guards commander Gen. Gholamali Abuhamzeh warned that dozens of U.S. targets were within reach of the Islamic regime following Soleimani’s killing.
“Some 35 U.S. targets in the region, as well as Tel Aviv, are within our reach,” Abuhamzeh was quoted by Tasnim news agency as saying. He also raised the prospect of possible attacks on U.S. destroyers and other warships in the Strait of Hormuz.
Experts and others familiar with the situation told The Epoch Times that Iran Supreme Leader Ali Khamenei is unlikely to order attacks on U.S. assets while the nation is mourning Soleimani.
“Khamenei is unlikely to go to war during the coming days, as he’s scheduled to pray over Soleimani on Monday at Tehran University,” said Sam Bazzi, Middle East expert and founder of Hezbollah Watch.
The airstrike that killed Soleimani also killed Abu Mahdi al-Muhandis (or al-Mohandis, or Jamal Jaafar Ibrahimi), the deputy commander of Iraq’s Popular Mobilization Forces (PMF). That’s an umbrella grouping of paramilitary forces, mostly Iran-backed Shi’ite militias that were formally integrated into Iraq’s armed forces amid efforts to defeat the ISIS terrorist group.
Allen Zhong and Reuters contributed to this report.