The morning Iran answered the killing of General Qassem Suleimani with a missile barrage, the world’s markets got a live lesson in pricing a war. More than a dozen ballistic missiles, fired at the Al Assad and Erbil air bases in Iraq “in the name of martyr General Qassem Suleimani” as the Revolutionary Guard Corps put it, sent oil up and equities down across three continents on that January 2020 Wednesday.
The moves were sharp and, tellingly, brief. Brent crude, the international benchmark, spiked $3.48 to $71.75 in London at the open — busting through the $70 mark, up as much as 4% right after the strike — before retreating to trade 78 cents higher at $69.05. American benchmark crude jumped $2.95 to $65.65 and settled back to $63.25, up 55 cents. Both contracts stayed more than 1% above their Tuesday levels, but the panic premium drained within hours.
Pricing For An All-Out War
The fear was legible in every quote of the day. “Investors appear to be pricing for an all-out war,” Jingyi Pan of IG wrote in a research note. President Donald Trump, whose order had sent the drone that killed Suleimani near the Baghdad airport the previous Friday, tweeted “All is well!” and “So far, so good!” while casualty assessments were ongoing. Iran’s foreign minister called the missile firings “proportionate measures in self-defense.” Everyone, in other words, was calibrating for the possibility that this was round one rather than the whole fight.
Equities read it the same way. Tokyo’s Nikkei 225 fell 1.6%, ending at 23,204.76, while Hong Kong’s Hang Seng lost 0.9% to 28,087.92, with Shanghai down 1.2% and Seoul’s Kospi off 1.1%. In Europe, London’s FTSE 100 dropped 0.6% to 7,525.48 and Frankfurt’s DAX shed 0.7%, closing at 13,134.26. Wall Street futures pointed lower, the S&P 500 contract off 0.2%.
The Safe-Haven Trade
Money did what it does at such moments. Gold, which had touched its highest price in nearly seven years, held its momentum, and an exchange-traded fund tracking the metal added 3% on the day. The dollar held at 108.43 yen while the euro slipped to $1.1139. The classic geometry of fear: commodities and havens up, everything with earnings attached down.
The second-order worries came quickly. Higher imported oil could feed inflation in economies like China and India, noted Rajiv Biswas of IHS Markit, constraining central banks precisely when they would want to ease policy to support growth. In Australia, the tension landed on a market already battling deadly and expensive bushfires; the ASX fell about 1% before recovering most of it, but Qantas, whose code-shares with Dubai-based Emirates sit just across the Persian Gulf, closed down almost 3.4%. The US Federal Aviation Authority had banned American carriers from the region. “Each airline makes its own judgment,” said Peter Gibson, a spokesman for Australia’s Civil Aviation Safety Authority.
What The Episode Taught
Strip the day to its mechanics and the lesson is about repricing speed. The entire war premium on crude appeared and mostly evaporated inside one trading session, because nothing structural — no supply lost, no export route closed — had actually changed. What the attack established was a template: geopolitical threat inflates the oil price, and the inflation persists only as long as the threat does.
The sequel, visible in the Los Angeles Times’ own later coverage, shows the template holding. US strikes on Iranian targets in the Strait of Hormuz in August 2026 pushed oil up again; hopes of an end to the Iran war that April rallied stocks worldwide as prices eased. Six years on, the January 2020 barrage remains the reference case — the day markets learned how fast fear enters crude, and how fast it leaves when the missiles stop.
Sources
- Oil up, stocks down after Iran missile attack on U.S. troops – Los Angeles Times
- Oil prices surge after Iranian missile attack sparks fears of war with US | Iran | The Guardian
