Oil prices edged lower on Wednesday after Iraq resumed crude exports through a pipeline to Turkey’s Mediterranean port of Ceyhan, offering modest relief to global markets grappling with supply disruptions across the Gulf region.
Brent crude futures slipped by 31 cents, or 0.3%, to $103.12 a barrel by 0902 GMT, while U.S. West Texas Intermediate (WTI) crude fell $1.56, or 1.6%, to $94.65. The decline followed a more than 3% surge in Brent prices on Tuesday.
In Iraq, sources from the state-run North Oil Company said exports had restarted after Baghdad reached an agreement with the Kurdistan Regional Government (KRG) to resume flows through the pipeline to Ceyhan.
Officials indicated Iraq aims to pump at least 100,000 barrels per day through the route, which had been disrupted amid regional tensions.
However, analysts cautioned that the restart would only provide limited supply relief, as Iraq’s overall oil production remains significantly reduced due to the ongoing Iran conflict.
Output from Iraq’s southern oilfields has plunged by about 70% to roughly 1.3 million barrels per day since early March after the Strait of Hormuz a key shipping route for around 20% of global oil was effectively shut.
The conflict intensified this week after Iran confirmed that security chief Ali Larijani was killed in an Israeli strike, one of the highest-profile casualties since Iran’s supreme leader Ayatollah Ali Khamenei was killed at the start of the U.S.-Israeli war in late February.
A senior Iranian official said the country’s new leadership has rejected de-escalation proposals delivered by intermediary nations, signaling continued geopolitical tensions.
Meanwhile, the U.S. military said it carried out strikes on Iranian coastal positions near the Strait of Hormuz to counter anti-ship missile threats to international shipping.
Adding to market concerns, Libya’s National Oil Corporation reported that flows from the Sharara oilfield were being rerouted through alternative pipelines following a fire, while U.S. crude inventories rose by 6.56 million barrels in the week ending March 13, according to market sources.