Global oil prices edged lower on Tuesday, sliding under the $66 per barrel mark, as new supply agreements in Iraq reignited market concerns over potential oversupply.
Brent crude futures fell 0.57%, trading at $65.69 per barrel compared with the previous session’s close of $66.07. Similarly, U.S. benchmark West Texas Intermediate (WTI) dropped 0.53% to settle at $61.93, down from $62.26 in the last trading session.
The downturn followed news from Iraq’s Kurdish Regional Government (KRG), which confirmed that an agreement had been reached with Baghdad and international oil firms to resume crude exports.
KRG spokesperson Peshawa Hawramani announced that longstanding disputes between Iraq’s central government, the Kurdish administration, and producing companies had finally been resolved, paving the way for a three-way contract.
The deal comes after the international arbitration court in Paris halted crude shipments from KRG and Kirkuk through Türkiye’s Ceyhan port on March 25, 2023, following legal action filed by Baghdad.
In June, KRG Prime Minister Masrour Barzani had strongly criticized the prolonged suspension, warning that it was damaging the region’s economy and energy sector.
Analysts caution that while oil demand growth remains uncertain, the restart of Kurdish exports could exacerbate supply-side pressures, pushing prices further down.
Meanwhile, Iraq’s State Oil Marketing Organization (SOMO) disclosed that the country’s crude exports averaged 3.38 million barrels per day (bpd) in August, with projections suggesting an increase to between 3.4 million and 3.45 million bpd for September. This rise follows Iraq’s gradual reversal of voluntary production cuts under the OPEC+ pact.
Market watchers are also awaiting the American Petroleum Institute’s estimates on U.S. commercial crude inventories, expected later on Tuesday, for clues on global demand trends. The U.S. Energy Information Administration (EIA) will release official inventory figures on Wednesday.
