US Strikes Iraqi Militias, Baghdad Warns of Response

US forces struck headquarters and residences of leaders of Iran-backed militias in Iraq on Tuesday. On Wednesday, a base in Anbar province in western Iraq was hit by airstrikes. The base was reportedly struck by US forces on Tuesday as well, the day before.

The Iraqi government declared the strikes an illegal attack on its sovereignty and stated it would respond and retaliate in exercise of its right to self-defense. Iraqi Prime Minister Mohammed Shia Al-Sudani stated that the country would respond and retaliate against military attacks using warplanes and drones, in accordance with its right to self-defense. The Iraqi Foreign Ministry plans to summon the US Chargé d'Affaires in Iraq and Iraq's ambassador to Iran on Wednesday.

These military tensions and geopolitical uncertainties signal potential impacts on the market, necessitating analysis of crude oil supply chains and geopolitical risk indicators. The repetition of these strikes indicates the level of military activity in the region, which can act as a factor of volatility in the international energy market. This geopolitical instability heightens market vigilance regarding energy supply, demand, and price stability. As the Iraqi government foreshadows a strong response to sovereignty violations, uncertainty increases for energy logistics routes, directly impacting related asset prices. International oil prices are reacting as the geopolitical crisis escalates due to the US military strikes.