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Oil prices rose more than $1 a barrel on Tuesday after an anticipated resumption of exports from Iraq’s Kurdistan region was delayed, easing investor concerns that additional flows could worsen oversupply in a fragile market.
Brent crude settled 1.6 per cent higher at $67.63 a barrel, while West Texas Intermediate, the US marker, gained 1.8 per cent to close at $63.41. Both benchmarks recovered earlier losses, snapping a four-session decline in which prices had slipped about 3 per cent.
The prospect of 230,000 barrels per day of Kurdish oil returning to international markets via Turkey has been hanging over traders since Baghdad, the Kurdish regional government and oil companies announced a framework deal to end a year-long export halt. But exports had not restarted as of Tuesday, with producers demanding assurances over debt repayments before reopening pipelines.
“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, senior analyst at Price Futures Group.
The delay provided temporary relief to traders already grappling with a market tilted towards surplus. The International Energy Agency this month forecast that global supply growth would accelerate this year, warning that a sustained glut could emerge by 2026 as Opec+ members and non-Opec producers alike expand output.
Additional downward pressure stems from softening demand, shaped by slower economic growth, trade frictions and the accelerating adoption of electric vehicles. UBS analyst Giovanni Staunovo noted that while supportive elements are still low OECD oil inventories, rising Opec+ exports and the absence of new sanctions targeting Russian supplies continued to weigh on sentiment.
The European Union is weighing tighter restrictions on Russian oil exports, while Ukraine on Tuesday claimed strikes on distribution facilities in Russia’s Bryansk and Samara regions. President Volodymyr Zelensky is expected to use a meeting with US president Donald Trump at the UN to press for fresh sanctions against Moscow.
