Just yesterday markets were beginning to shake off the pressure of the worsening in the relations between the United States and Iran after last week’s US strike on Iranian military officers. However, today the geopolitical pressure has been renewed, after Iran attacked some of the US troops stationed in Iraq in response to Friday’s airstrike.
According to the Iranian government, that is the only response they will issue; however, if the United States decides to respond to today’s attack, this will start a whole series of back-and-forth blows between the two countries.
In the current tense environment on the markets, investors are directing their money towards safe assets like the Japanese yen, the Swiss franc, precious metals, and the US dollar. Conversely, the riskier assets that enjoyed a rally earlier such as stocks and indices (especially in the European Union) are suffering losses currently.
Moreover, conflict in the Middle East always has an impact on the price of oil, due to the volatility of the region and the possibility of military operations interrupting the regular oil extraction and transportation activities of OPEC. Not surprisingly, the price of oil spiked earlier when the news of the missile attack broke, but it has calmed down a little since.
As of the writing of this article, Brent crude oil is trading near $69, while WTI oil is at around 63.23 US dollars per barrel.
