Via Financial Times

Qassem Soleimani, the head of the Iranian Revolutionary Guards’ overseas forces, has been killed in Iraq, according to state media in Iran.

The confirmation followed initial reports in Iraq that the military leader — who controlled Tehran’s extensive influence across the Middle East — had died in a US air strike on Baghdad airport.

If the US involvement is confirmed the death would represent the most dramatic escalation in the conflict between the US and Iran under the Trump administration. Washington has yet to confirm any involvement.

The death of Soleimani comes just days after the US embassy in Iraq was attacked by Iran-backed militia. At that stage the US announced the deployment of 750 more troops to the country and blamed Tehran for the attack.

“It’s one of the most consequential assassinations in the Middle East in years and will have violent and first order implications primarily for the US, Iran and Israel,” said David Aaron Miller, a former state department official at the Carnegie Endowment for International Peace.

“The so-called shadow war will intensify with terror and additional assassinations,” he added, saying it could also lead to full-blown war between the three countries.

Oil prices jumped by more than 3 per cent on the reports to reach $68.51 a barrel, as traders bet the threat to supplies from the region had increased. 

Helima Croft, a former CIA analyst who heads up commodity strategy at RBC Capital Markets, said that the death of Soleimani would raise tensions throughout the Middle East and would mark a significant escalation in US policy towards Iran. 

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“If true, this bring us to the precipice of a war,” she said. “Oil market participants may not yet fully understand the momentous implications, but I am sure Pentagon planners do.”

Ms Croft said that the strikes could increase risks for US oil companies such as ExxonMobil and Chevron that are active in Iraq, should Iran retaliate. 

“But it is not just Iraq,” she said. “Iranians have the ability to target Americans anywhere where their proxy groups operate.”