Oil prices declined on Monday as the resumption of crude exports from Iraq’s Kurdistan region and signals of an OPEC+ output hike weighed on the market.
By 9 AM, Brent crude futures fell 34 cents, or 0.5 per cent, to $69.79 a barrel, retreating from Friday’s close at the highest since 31 July. US West Texas Intermediate (WTI) crude dropped 43 cents, or 0.7 per cent, to $65.29 a barrel, erasing much of the previous session’s gains, reported Reuters.
“Ongoing fears of production increase are limiting gains, but a tight near-term outlook has crude prices in a vice as the trading week begins,” said Michael McCarthy, CEO of investor platform Moomoo Australia and New Zealand.
Kurdistan Crude Flows Resume After 2.5-Year Deadlock
Crude shipments from the semi-autonomous Kurdistan region of northern Iraq resumed on Saturday, flowing through a pipeline to Turkey’s Ceyhan port for the first time in two and a half years, Iraq’s oil ministry confirmed.
The interim agreement between Iraq’s federal government, the Kurdistan Regional Government (KRG), and foreign oil producers will initially allow 180,000–190,000 barrels per day (bpd) of crude exports, Iraq’s oil minister told Kurdish broadcaster Rudaw. Additionally, volumes could eventually reach 230,000 bpd, following US pressure to resume flows. This would also, consequently, boost market share.
OPEC+ Set to Approve Output Hike
The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) is expected to approve another production hike at its upcoming meeting on Sunday.
Citing three sources familiar with the talks, the news agency reported that the group may add at least 137,000 bpd as members look to capture greater market share amid firming prices.
Despite these plans, OPEC+ has been producing nearly 500,000 bpd below its targets, tempering fears of a supply glut. “As OPEC prepares to further draw down its spare capacity, the risk of an October geopolitical surprise continues to rise,” analysts at RBC Capital Markets warned.
Geopolitical Risks Still Loom
Market sentiment remains shaped by geopolitical risks, including Ukraine’s drone attacks on Russia’s energy infrastructure, which cut the country’s fuel exports and drove both Brent and WTI to post gains of over 4 per cent last week, their strongest weekly performance since June.
Over the weekend, Russia launched sustained strikes on Kyiv and other Ukrainian cities, underscoring supply concerns.
Separately, the United Nations reinstated an arms embargo and sanctions on Iran over its nuclear programme, after a move by European powers triggered the process. Tehran has warned that it will respond harshly to the measures, adding yet another layer of uncertainty for oil markets.
