Reports of conflict on the border between Iraq and Syria – Developing story

There are reports building up of recent airstrikes in eastern Syria against a convoy of the Kataib Imam Ali, an Iranian backed Iraqi militia.

Developing story

There are some reports assuming that Israel is involved.

Casting minds back, Iraq reopened its Qaim border-crossing with Syria late December, following eight years of closure amid regional turmoil in the latest sign of normalization between Baghdad and Damascus. This was regarded as a win for their mutual ally, Iran – the crossing between the Iraqi town of Qaim and Syria’s Boukamal was expected to strengthen trade between the two countries. The border is located near an alleged Iranian-controlled compound seen as key to facilitating Iran’s arms shipments – it would thus make sense that Israel would wish to disrupt the region. The border area had seen a number of airstrikes on paramilitary groups aligned with Iran that have been attributed to Israel.

This escalation of the crisis in the Persian Gulf follows Iranian official's warnings, including President Rouhani and a top IRGC commander, that Iran's retaliation for the killing of IRGC General Qasem Suleimani wasn't yet over.

Update

According to the Washington Post Beirut bureau chief covering the region, Liz Sly, sources claimed that the Israeli airstrikes were indeed targeting weapons shipments. 

Market implications

Keeping traders on their toes. If history is anything to go by, then unless there is a grand escalation of troubles in the region that could provoke ouright war (US milatary strikes and involvement) or intensify the crisis, so long as the US-China trade deal gets signed without any delay of hic-ups, markets will likely 'keep calm and carry on', business as usual.