LONDON: Oil prices rose on Tuesday after a deal to resume oil exports from Iraq’s Kurdistan stalled, pacifying some investor concerns that the restart would add to global oversupply fears.
Brent crude futures were up 61 cents, or 0.9%, to $67.18 a barrel at 1110 GMT, while U.S. West Texas Intermediate crude was up 67 cents, or 1.1%, at $62.95 a barrel, both recouping modest earlier losses.
Brent and WTI had fallen for the previous four sessions, dropping around 3%.
Investors on Tuesday were watching developments around the deal to restart oil exports from Iraq’s Kurdistan. Two oil producing firms asked for assurances their debts would be repaid, stalling the deal.
The deal between Iraq’s federal and Kurdish regional governments and oil firms is designed to lead to the resumption of about 230,000 barrels per day of oil exports from Kurdistan to the global market via Turkey. They have been suspended since March 2023.
Overall, the global oil market is bracing for elevated supply and slowing demand, hampered by the take-up of electric vehicles and economic pressures fuelled by U.S. tariffs.
In its latest monthly report, the International Energy Agency said world oil supply would rise more rapidly this year and a surplus could expand in 2026 as OPEC+ members increase output and supply from outside the producer group grows.
Still, risks overhang the market as traders monitor the European Union’s consideration of stricter sanctions on Russian oil exports, as well as any escalation of geopolitical tensions in the Middle East.
“Supportive elements are still low OECD oil inventories,” UBS analyst Giovanni Staunovo said. “On the other hand, higher crude exports from OPEC+ are a headwind for prices as well as the lack of new sanctions targeting Russian oil exports.”
U.S. crude oil stockpiles were expected to have risen last week, while gasoline and distillate inventories likely fell, a preliminary Reuters poll on Monday showed.
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