Oil Fluctuates as Supply, Geopolitics Confusion
Oil fluctuates as the prospect of increased supply from Iraq and uncertainty over President Trump’s tariff plans and efforts to end the three-year war in Ukraine cloud the market outlook.
Global benchmark Brent is steady above $74 a barrel after falling 2.7% on Friday, while U.S. benchmark West Texas Intermediate is up slightly after briefly dropping below $70 at the week’s open.
Iraq could recommend exports from the semi-autonomous Kurdistan region as early as this week if a pipeline to Turkey resumes operations, Iraqi Oil Minister Hayyan Abdul Ghani said on Monday. An Iraqi deputy minister said the region could ship 185,000 barrels a day, while the ministry maintained exports would remain within OPEC limits.
Crude has had a bumpy start to 2025 as early gains unravel, with prices losing all of this year’s gains. The decline comes as Trump’s tariff actions weigh on the global growth outlook, U.S. stockpiles rise and concerns persist about sluggish Chinese demand. The Trump administration appears to be targeting China with a series of moves involving investment, trade and other issues that raise the risk of a possible worsening of relations between the U.S. and its main economic rivals.
In Europe, Ukrainian President Volodymyr Zelenskiy has said he would be prepared to resign if it would ensure peace in his country. Trump has called for Ukraine to hold elections and opened talks with Russia.
A settlement with Moscow could pave the way for sanctions relief, potentially diverting export flows.
"There is still uncertainty about Trump's next move on tariffs and concerns about the restart of the Iraq-Turkey pipeline," said UBS Group AG commodities analyst Giovanni Staunovo. Conflicting signals are making it difficult to read the market, "so you're better off staying on the sidelines until you get some clarity." With sentiment weakening, OPEC and its allies are now expected to again delay plans to revive production as the market faces a potential surplus. More than 70% of traders and analysts surveyed expect the group to delay its first monthly increase scheduled for April.
At the same time, there was some strength in some parts of the market with the Brent-Dubai swap rate, a measure of the relative value of European and Middle Eastern crude, at its lowest since June. That suggests refiners are still eager to get their hands on the heavy sour crude produced in the region and supplies of which have been constrained by OPEC+ cuts.
Brent for April settlement gained 0.2% to $74.60 a barrel at 11:08 a.m. in London.
WTI for April delivery was 0.2% higher at $70.54 barrel.
Earlier, futures lost as much as 0.9% to $69.80.
Source: Bloomberg
