Baghdad, Iraq – Oil prices dipped slightly on Wednesday, giving up some of the sharp gains made in the previous session. This price movement followed the announcement of an agreement between the Iraqi central government and the Kurdistan Regional Government to resume oil exports via the Turkish port of Ceyhan, a move that partially eased concerns about supply shortages in the Middle East.
Details of price movements
After a strong rally of more than 3% on Tuesday, Brent crude futures fell 67 cents, or 0.65%, to $102.75 a barrel by 02:09 GMT.
Meanwhile, U.S. West Texas Intermediate crude declined $1.18, or 1.23%, to trade at $95.03 a barrel.
Despite this slight dip, prices remain at historically high levels, with Brent crude futures holding above $100 for the past four sessions,
driven by the absence of any signs of de-escalation in the conflict with Iran, which has caused widespread disruption to regional oil exports.
Resumption of Iraqi exports
Iraqi Oil Minister Hayyan Abdul Ghani confirmed to state media that oil flows through the Ceyhan port were scheduled to begin at 7:00 GMT on Wednesday.
According to industry officials, Iraq aims to pump at least 100,000 barrels per day (bpd) initially to offset the shortfall.
However, analysts view this move as more symbolic than a fundamental solution.
Tony Sycamore, a market analyst at IG, stated, “While resuming pumping buys some time, 100,000 bpd doesn’t fundamentally alter the supply
and demand balance, especially since Iraq is still missing around 2 million bpd of its usual export capacity.”
Hormuz Strait Crisis
The biggest problem remains in southern Iraq, where reports on March 8 indicated that production
at the main oil fields had plummeted by 70%, to just 1.3 million barrels per day.
This sharp decline is attributed to the de facto closure of the Strait of Hormuz due to ongoing military operations.
This vital waterway carries approximately 20% of the world’s oil supply, putting global energy security at risk.
