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The Soleimani Effect: A Game-Changer for Iraqi Crude Dynamics? By Ahmed Mehdi

  1. The changing geopolitical landscape for Iraq’s energy sector


Much ink has been spilled over the past week assessing the current confrontation between the US and Iran following the US-ordered airstrike against Qassem Soleimani, commander of the Iranian Revolutionary Guards’ Quds force and Abu Mahdi al-Muhandis, deputy head of Iraq’s Popular Mobilisation Forces (PMF). While the US assassination prompted a spike in oil prices – with front-month Brent prices rising to above $70/bbl – the risk premium has now faded, with the market having read Iran’s latest missile attack on military bases in Western Iraq and Erbil as a face-saving reprisal without crossing US redlines (as the attack was telegraphed in advance).1 Likewise, President Donald Trump’s decision to respond economically (via further sanctions on Iran), rather than militarily, has also led Brent and Dubai front-month prices to retreat.

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