Oil prices fell on Monday as Iraq’s Kurdistan region resumed crude exports through Turkey for the first time in over two years. The drop was also driven by expectations of an upcoming OPEC+ production hike in November, which could further add to global supply.
Brent crude futures slipped 43 cents, or 0.6%, to $69.70 a barrel by 06:30 GMT. This came after Brent closed on Friday at its highest level since July 31. U.S. West Texas Intermediate (WTI) crude was down 49 cents, or 0.8%, at $65.23 a barrel, erasing most of its prior session gains.
Michael McCarthy, CEO of Moomoo Australia and New Zealand, said: “Fears of increased production are limiting gains, but a tight short-term outlook is keeping prices in check as the new trading week begins.”
Kurdistan restarts crude exports after long pause
On Saturday, crude oil began flowing again from northern Iraq’s Kurdistan region to Turkey through the Ceyhan pipeline. This marks the first shipments in two and a half years, following an interim deal between Iraq’s federal government, the Kurdistan Regional Government (KRG), and foreign producers.
The deal will initially allow 180,000 to 190,000 barrels per day (bpd) to reach Turkey’s Ceyhan port. Iraq’s oil minister said exports could eventually rise to 230,000 bpd, with U.S. support for the restart aimed at boosting global supplies.
OPEC+ expected to approve fresh output hike
OPEC+ is preparing to approve another production increase of at least 137,000 bpd during its upcoming meeting on Sunday. Higher oil prices have encouraged the group to seek greater market share. However, OPEC+ output remains nearly 500,000 bpd below its official targets, easing fears of oversupply.
Analysts at RBC Capital Markets warned that drawing down spare capacity raises risks of geopolitical shocks in October. They also highlighted that conflicts involving Russia and Iran continue to add uncertainty for energy markets.
Geopolitical tensions support volatility
Last week, Brent and WTI both rose more than 4%, their largest weekly gains since June. The jump followed Ukraine’s drone attacks on Russian energy infrastructure, which cut the country’s fuel exports. In response, Russia launched one of its most sustained assaults on Kyiv since the war began.
Meanwhile, the United Nations reinstated arms embargoes and sanctions on Iran over its nuclear program. Tehran warned of a strong response to the decision, further fueling concerns of regional instability in global energy markets.
