The assassination of Iranian Revolutionary Guard general Qasem Soleimani by the US is a major escalation in the conflict between the US and Iran. It adds considerable new uncertainty to an already unstable region.

In taking this action, Washington has removed one of Iran’s most powerful military and political figures, who has been responsible for much of the Islamic Republic’s military activity against US interests in the region for many years.

The Pentagon described the strike as ‘decisive defensive action’ taken to prevent future attacks against US personnel in the region. It said that the strike was ordered by US President Donald Trump.

It comes at the end of a week that saw crowds of protesters in Iraq attack the US embassy in Baghdad following US air strikes against Iran-backed militia in Iraq and Syria.

It is certain that Iran will strike back against US interests in the region and those of its allies in the region.

Soleimani is hailed as a national hero by many in Iran. As commander of the Iranian Revolutionary Guard’s elite Quds Force, he has been the mastermind behind Iran’s military activities in Iraq, Syria, Lebanon and elsewhere.

Iran’s Supreme Leader Ayatollah Ali Khamenei has described the killing as a criminal act and has promised retaliation.

The question now is what will that retaliation look like and what will be the further consequences of that.

Soleimani’s killing increases fears of war in the region and of major disruption to regional oil supplies through military or cyber attacks against oil facilities or to block the Strait of Hormuz.

Fears that Iranian reprisals will further destabilise the region and disrupt Middle East oil supplies saw oil prices jump about 4 per cent in the immediate aftermath of the news of Soleimani’s killing.

Unlike the short-term spike in oil prices that followed the attacks against Saudi oil facilities in 2019, this latest incident is likely to add a security-risk premium to oil prices for the foreseeable future.