Oil Prices Fall as Iraq-Turkiye Export Deal Eases Supply Concerns

Oil prices fell more than $2 per barrel on Wednesday to pare some of Tuesday’s sharp gains after the Iraqi government and Kurdish authorities reached a deal to resume oil exports via Turkiye’s Ceyhan port, offering limited relief to supply concerns in global markets.

Despite the decline, prices remained elevated amid ongoing tensions linked to the conflict involving Iran, which has disrupted oil flows across the region. Brent crude futures, which had risen more than 3 per cent in the previous session, dropped $2.26, or 2.19 per cent, to $101.16 a barrel by early morning trading. US West Texas Intermediate crude fell $2.99, or 3.11 per cent, to $93.22.

The agreement between Baghdad and Kurdish authorities is expected to restore shipments through the Turkish port of Ceyhan port. Iraq’s oil minister, Hayan Abdel-Ghani, said flows were set to resume later on Wednesday, with initial volumes estimated at around 100,000 barrels per day.

Market analysts said the development provided a degree of reassurance, even as broader supply risks remain. Anh Pham, a senior analyst at LSEG, noted that any additional oil returning to the market is significant under current conditions, contributing to the price pullback. However, she added that prices are still hovering around the $100 mark due to persistent geopolitical uncertainty.

The wider outlook continues to be shaped by disruptions in the Strait of Hormuz, a key route through which about one-fifth of global oil supply passes. Ongoing hostilities have significantly restricted exports, particularly from Gulf producers. Iraq’s southern oilfields have also been affected, with production reportedly dropping by around 70 per cent earlier this month.

Tensions escalated further following the killing of senior Iranian official Ali Larijani in an Israeli strike, marking one of the highest-profile casualties since the conflict began. Reports also indicated that Iran’s leadership has rejected calls for de-escalation conveyed through intermediary nations.

The United States has intensified its military response, targeting sites along Iran’s coastline near the Strait of Hormuz. US officials said the strikes were aimed at neutralising anti-ship missile threats to international shipping routes. Some analysts suggested these developments could influence the trajectory of the conflict, though uncertainty remains high.

Additional pressure on prices came from rising US crude inventories. Industry data showed stockpiles increased by 6.56 million barrels in the week ending March 13, significantly higher than expectations from analysts surveyed earlier.

While the resumption of Iraqi exports has provided short-term relief, market participants continue to monitor geopolitical developments closely, with oil prices likely to remain volatile as supply risks persist.