Oil prices climbed more than $1 per barrel on Tuesday after hopes of restarting Kurdish oil exports stalled. The delay eased some investor worries that a resumption could increase global oversupply.
By mid-morning trading, Brent crude futures rose $1.18, or 1.8%, to $67.75 a barrel, while U.S. West Texas Intermediate (WTI) crude gained $1.27, or 2%, to $63.55. Both benchmarks recovered from earlier losses.
Exports of pipeline oil from Iraq’s Kurdistan region to Turkey have not yet resumed. The restart has been delayed as two major producers demanded debt repayment guarantees. The proposed deal between Iraq’s federal government, the Kurdish regional authority, and oil firms aims to restart around 230,000 barrels per day, halted since March 2023.
Brent and WTI had declined for four straight sessions, losing around 3%. The lack of progress on Kurdish oil added support, reversing the downward trend.
“The market reacted too early to reports of a Kurdistan deal. With the restart stalled, those barrels remain out of the market,” said Phil Flynn, senior analyst at Price Futures Group.
Globally, oil markets continue to face mixed signals. Supply is expected to rise faster this year, according to the International Energy Agency (IEA). A surplus could expand into 2026 as OPEC+ and non-OPEC producers increase output. At the same time, demand is being pressured by electric vehicle adoption and U.S. tariffs.
Geopolitical risks also weigh on the outlook. The European Union is considering tighter sanctions on Russian oil exports, while tensions in the Middle East remain high. UBS analyst Giovanni Staunovo noted that low OECD inventories are supportive, but higher OPEC+ supply and a lack of new sanctions against Russia limit upward momentum.
In the U.S., crude inventories were expected to rise last week, while gasoline and distillate stocks likely fell, according to a Reuters survey. Traders await official stockpile data from the American Petroleum Institute. Flynn added that distillate levels remain a “soft underbelly” of the market, with any build helping to offset supply concerns amid ongoing Russian infrastructure attacks.
Ukraine confirmed strikes on two Russian oil facilities in the Bryansk and Samara regions overnight, adding to supply disruption risks.
