Oil prices dip on Kurdish export deal
New Iraq-KRG pact raises supply fears amid weak demand
Oil prices fell as traders weighed the impact of a new export agreement that could boost supply from Iraq’s semi‑autonomous Kurdish region. Brent crude slipped to $65.69 a barrel, down 0.57%, while U.S. West Texas Intermediate dropped to $61.93, down 0.53%. The decline follows a tripartite deal announced by Iraq’s central government, the Kurdish Regional Administration (KRG) and major oil companies to resume crude shipments that had been halted by a Paris‑based arbitration court in March 2023.
KRG spokesperson Peshawa Hawramani said the long‑standing dispute over the Ceyhan‑Turkey pipeline had been resolved and a three‑party contract would be signed. Analysts noted that the reactivation of the pipeline, which typically moves around 400,000 barrels per day of Kurdish oil, adds to fears of a supply glut at a time when demand growth appears to be slowing.
Iraq’s State Oil Marketing Organization reported that exports averaged 3.38 million bpd in August and are expected to rise to 3.40‑3.45 million bpd in September after gradually rolling back voluntary OPEC+ production cuts. The increase in Iraqi output, combined with rising non‑OPEC supply—particularly from the United States—and weak economic data from China and parts of Europe, has heightened concerns that demand may not keep pace with the added barrels.
Market participants are also awaiting the American Petroleum Institute’s forecast for U.S. commercial crude inventories later in the day, while official inventory figures from the U.S. Energy Information Administration are due. Unless OPEC+ tightens output or demand rebounds more robustly, the combined effect of the Kurdish export deal and broader supply growth could keep oil prices under downward pressure in the near term.
