HOUSTON: Oil prices rose by more than USD1 a barrel on Tuesday after a deal to resume exports from Iraq’s Kurdistan stalled, pacifying some investor concerns that the restart would add to global oversupply fears.
Brent crude futures were up USD1.18, or 1.8 percent, to USD67.75 a barrel by 10:38 a.m. EDT (1438 GMT), while US West Texas Intermediate crude rose USD1.27, or 2 percent, to USD63.55 a barrel, both recouping modest earlier losses.
Pipeline oil exports from Iraq’s Kurdistan region to Turkey had yet to restart on Tuesday despite hopes of a deal to end the deadlock, as two key producers asked for debt repayment guarantees.
The deal between Iraq’s federal and Kurdish regional governments and oil firms aims to resume exports of about 230,000 barrels per day of oil from Kurdistan to the global market via Turkey, halted since March 2023.
Brent and WTI had fallen for the previous four sessions, dropping around 3 percent. Both benchmarks rose more than USD1 a barrel during the session on Tuesday. “This was a perfect example of do not count your barrels until they have been pumped. The market sold off on reports of a Kurdistan deal, and the lack of a deal has now taken those barrels out of the market,” said Phil Flynn, a senior analyst at Price Futures Group.
Overall, the global oil market is bracing for elevated supply and slowing demand, hampered by the take-up of electric vehicles and economic pressures fuelled by US 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 producer 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.