KEY POINTS
- Oil prices slipped for a fifth straight session.
- Iraq and Kurds struck a deal to restart pipeline flows.
- Oversupply and weak demand outlook pressured crude.
Oil prices slipped for the fifth consecutive session on Tuesday after Iraq’s federal government and Kurdish authorities reached a preliminary deal to restart crude exports through Turkey. The agreement, which ends a prolonged standoff, has added fresh pressure to a market already rattled by concerns about oversupply.
Oversupply fears weigh on oil prices
Brent crude futures <LCOc1> declined 42 cents, or 0.63 percent, to $66.15 a barrel by 03:32 GMT. U.S. West Texas Intermediate futures fell 36 cents, or 0.58 percent, to $61.92. Both benchmarks have now lost about 4 percent across five sessions.
“The prevailing theme remains oversupply concerns, while demand outlook stays uncertain heading into year-end,” said Anh Pham, senior analyst at LSEG. “The restart of the KRG pipeline has also been putting downward pressure on prices.”
The deal will allow about 230,000 barrels per day to flow again from northern Iraq, ending a suspension in place since March 2023. Two Iraqi oil officials confirmed the breakthrough to Reuters on Monday, noting that Baghdad and Erbil had reached consensus with oil companies involved in the exports.
Global supply outlook raises pressure
The global oil market is facing mounting headwinds. The International Energy Agency said in its latest monthly report that world supply will rise more quickly this year. It warned of a potential surplus in 2026 as OPEC+ members increase output and producers outside the alliance add to global flows.
Meanwhile, traders are watching geopolitical risks. The European Union is weighing tougher sanctions on Russian crude exports, while instability in the Middle East continues to threaten supply chains.
In the U.S., a preliminary Reuters poll suggested crude inventories rose last week, although gasoline and distillate stocks likely fell.
Accoridng to Reuters, Saudi Arabia’s crude exports in July dropped to their lowest level in four months, according to data from the Joint Organizations Data Initiative. Iraq, OPEC’s second-largest producer, has lifted exports under the cartel’s broader output deal, state oil marketer SOMO said.
