Oil Prices Fall as Iraq and Kurdistan Agree to Restart Pipeline
Oil prices dropped for the fifth straight session on Tuesday after Iraq and the Kurdish regional government reached a preliminary deal to restart crude exports through a key pipeline. The agreement added to oversupply concerns weighing on the global market.
Brent and WTI Extend Declines
Brent crude futures fell 34 cents, or 0.51%, to $66.23 a barrel by 06:39 GMT. U.S. West Texas Intermediate (WTI) slid 29 cents, or 0.47%, to $61.99 a barrel. Over the past five sessions, Brent has dropped 3% and WTI 4%.
“The prevailing concern remains oversupply, while demand is still uncertain as we approach year-end,” said Anh Pham, senior analyst at LSEG. “The restart of the Kurdistan pipeline is also putting pressure on prices.”
Iraq-Kurdistan Pipeline Deal
On Monday, Iraq’s federal government and Kurdish officials struck an agreement with oil companies to resume exports through Turkey. The move will restart around 230,000 barrels per day of crude shipments that have been suspended since March 2023.
Oversupply Worries and Global Outlook
The oil market faces growing supply and weaker demand as electric vehicle adoption accelerates and U.S. tariffs weigh on global growth.
The International Energy Agency (IEA) recently forecast faster growth in world oil supply this year, with the potential for a larger surplus by 2026 as OPEC+ and non-OPEC producers expand output.
Geopolitical and Market Risks
Despite rising supply, risks remain. Traders are monitoring potential EU sanctions on Russian oil exports and escalating geopolitical tensions in the Middle East.
U.S. crude inventories were expected to increase last week, while gasoline and distillate stocks likely fell, according to a Reuters survey.
Meanwhile, Saudi Arabia’s oil exports dropped in July to their lowest level in four months, JODI data showed. Iraq, OPEC’s second-largest producer, has also raised shipments under the group’s OPEC+ supply deal, state oil marketer SOMO said.
