Crude oil futures shot up over 4.50% in early evening hours trading on Tuesday, January 7, 2020. The surge came as a result of a news report confirming that Iran has launched a series of missiles aimed at U.S. bases within Iraq.
U.S. officials have told ABC News that “ballistic missiles have been fired from insider Iran at multiple U.S. military facilities inside Iraq on Wednesday morning, local time.”
Confrontation With Iran Building Towards War
This marks a major escalation between the U.S. and Iran, after the recent drone strike killed General Soleimani. It is unclear what any immediate U.S. response may look like, as we await further information in the developing situation.
Iran’s state-run news outlet, ISNA, reported: “This morning, courageous fighters of the IRGC’s Air Force launched a successful operation called Operation Martyr Soleimani, with the code ‘Oh Zahra’ by firing tens of ground-to-ground missiles at the base of the terrorist and invasive U.S. forces named Ain Al Asad.”
WTI Crude Oil At Highest Level Since April 2019, Gold Above $1,600
As of Tuesday evening, WTI crude oil futures are up 4.50% to $65.51. This represents the highest level since late April 2019. Gasoline futures (RBOB) are also surging 4.45%, through late trading on Tuesday. Gas futures are currently trading around $1.7989, the highest price since August.
The safe haven trade in gold and silver continues to thrive, especially as tensions have risen in recent weeks. Gold prices are now above the $1,600 to $1,608, the highest level since 2013. Silver is up 1.56% to $18.68.
With Middle East tensions now boiling over into an all-out war with Iran, oil and gas prices could surge even higher. This could cause a broader ripple effect on the U.S. economy. As gas prices at the pump continue to rise, as they tend to do during Middle East unrest and uncertainty, the impact is felt by the consumer.