Over 1000 people have been killed due to the wide-spread violence which has erupted in Iraq in the month of June. Also, around the same number of people were seriously injured due to the unfortunate events which have plagued the country. United Nations Human rights spokesman, Rupert Colville said, “at least 757 civilians were killed and 599 injured in the northern provinces of Nineveh, Diyala and Saladdin between June 5-22.” Over 900 people were reported to have either been killed or injured during the same period in Baghdad. The events which have take place has undeniably had an effect on both the commodity and equity markets
Iraq’s economy is dominated by the oil sector. At it’s peak, it has brought in 95% of Foreign Exchange earnings in recent times. Iraq, OPEC’s second largest oil organisation, produces tons of oil each day (despite the production of oil which has reduced by more than half to 1.5million barrels a day and has over 100 billion barrels of oil in it’s reserves. Although the events in the country hasn’t affected oil supply, the future price of oil have swung over the last few days. Brent Futures experience near the highest of trading levels since September 2013 on the 23rd June but prices have now started to return to expected levels as fears relating to potential disruptions on foreign exports have been allayed.
Investors have been cautious and have been monitoring the current situation in Iraq. Uncertainty from investors has caused UK shares to fall sharply this week. The FTSE ended at 6733.62 on Wednesday 25th June 2014, down 0.8 percent from Tuesday 24th June 2014. The market closed at one of it’s lowest levels since 28th April 2014.
It will be interesting to see how the markets continue to evolve with the current situation in Iraq and the behaviour of investors as further developments unfold in the country.