Oil extends declines after Iraq, Kurdish governments agree to restart oil pipeline
Brent crude futures fell 34 cents, or 0.51%, to $66.23 a barrel by 0639 GMT, while U.S. West Texas Intermediate crude was down 29 cents, or 0.47%, at $61.99 a barrel.
Over the last five sessions, Brent and WTI declined by 3% and 4% respectively.
“The prevailing theme is still concerns on oversupply, while demand outlook is still uncertain as we approach year-end period. The restart of KRG pipeline has also been putting pressure on prices,” said LSEG senior analyst Anh Pham.
Iraq’s federal and Kurdish regional governments reached a deal with oil firms to resume crude exports via Turkey on Monday, two oil officials told Reuters.
The breakthrough will allow exports of about 230,000 barrels per day (bpd) to resume from Iraqi Kurdistan that have been suspended since March 2023. Overall, the global oil market is bracing for elevated supply and slowing demand hampered by the fast development of electric vehicles and economic woes fuelled by U.S. tariffs. In its latest monthly report, the International Energy Agency said world oil supply would rise more rapidly this year and a surplus could expand in 2026 as OPEC+ members increase output and supply from outside the group grows.
Still, risks overhang the market as traders monitor the European Union’s consideration of stricter sanctions on Russian oil exports, as well as any escalation of geopolitical tensions in the Middle East.
U.S. crude oil stockpiles were expected to have risen last week, while gasoline and distillate inventories likely fell, a preliminary Reuters poll on Monday showed.
Elsewhere, Saudi Arabia’s crude oil exports in July hit their lowest level in four months, according to data from the Joint Organisations Data Initiative (JODI) released on Monday.
Iraq, the Organization of the Petroleum Exporting Countries’ second-largest producer, has increased oil exports under an OPEC+ agreement, state oil marketer SOMO said.