Oil Fluctuates as Iraq Supply, Trump Moves Shadow Market Outlook
Oil fluctuated as traders weighed the prospect of rising supplies from Iraq, President Donald Trump’s latest attacks on China and efforts to end a three-year war in Ukraine.
Global benchmark Brent was steady above $74 a barrel after falling 2.7% on Friday. The U.S. appears to be targeting China with a series of moves involving investment, trade and other issues, raising the risk that relations could soon sour between the two economic rivals.
Meanwhile, Iraq could resume 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 came as Trump’s tariffs weighed on the global growth outlook, U.S. stockpiles rose and concerns persisted about sluggish Chinese demand.
Prices have largely been stuck in a tight range this month. In Europe, Ukrainian President Volodymyr Zelenskiy said he would be ready to step down if it would ensure peace in his country. Trump has called on 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 make 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 a slight strengthening 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.
Source: Bloomberg
