Oil prices fell on Monday as Iraq’s Kurdistan region resumed crude exports to Turkey after a 2.5-year halt, while OPEC+ prepared for another production hike in November, adding more supply to global markets.
Brent crude futures dropped 0.5% to $69.79 a barrel by 03:30 GMT, while U.S. West Texas Intermediate (WTI) crude slid 0.7% to $65.29, giving back most of Friday’s gains.
Iraq’s oil ministry confirmed that crude began flowing on Saturday through the pipeline from the semi-autonomous Kurdistan region to Turkey’s Ceyhan port. The deal between Iraq’s federal government, the Kurdistan Regional Government (KRG), and foreign oil producers will initially bring 180,000 to 190,000 barrels per day (bpd) back to the market, with potential to rise to 230,000 bpd.
Meanwhile, three sources familiar with the matter told Reuters that OPEC+ is expected to approve at least a 137,000 bpd output increase at its upcoming meeting as the group seeks to regain market share. Despite this, the alliance has been pumping nearly 500,000 bpd below its target, easing fears of an oversupply.
Analysts at RBC Capital Markets warned that as OPEC+ draws down its spare capacity, the risk of an October geopolitical shock is increasing. Oil prices rose more than 4% last week — the biggest weekly gain since June — largely driven by Ukrainian drone attacks on Russia’s energy infrastructure that curbed the country’s fuel exports.
Adding to market tensions, the United Nations has reinstated arms and other sanctions on Iran over its nuclear program, a move that Tehran has warned could trigger a harsh response.
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