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Summary
- Oil exports resumed on Wednesday amid security and economic challenges
- US crude stocks rose last week – sources cite API data
- Brent futures remain above $100 per barrel as no signs of Iran war de-escalation
(Reuters) – Oil prices fell on Wednesday after Iraq resumed crude exports via pipeline to Turkey’s Mediterranean port of Ceyhan, providing hopes for some relief amid disrupted supply from Gulf producers.
With no signs of de-escalation in the Iran conflict, benchmark Brent futures prices have settled above $100 per barrel for the past four sessions.
After rising more than 3% on Tuesday, Brent futures were down 31 cents, or 0.3%, to $103.12 a barrel by 0902 GMT on Wednesday. U.S. West Texas Intermediate crude dropped $1.56, or 1.6%, to $94.65.
In Iraq, North Oil Company sources said exports had resumed via pipeline after Baghdad and the Kurdistan Regional Government (KRG) agreed on Tuesday to restart flows. Two oil officials said last week that Iraq was seeking to pump at least 100,000 barrels per day (bpd) through the port.
“Despite this development, supply relief remains limited, with Iraq’s production at roughly one-third of pre-crisis levels and tanker traffic through Hormuz still largely restricted,” MUFG analyst Soojin Kim said.
Oil production from Iraq’s main southern oilfields, where most of its crude is produced and exported, had plunged by 70% to just 1.3 million bpd, sources said on March 8, as the Iran conflict effectively shut the vital Strait of Hormuz through which some 20% of global oil passes.
Iran confirmed on Tuesday that its security chief Ali Larijani had been killed in an Israeli attack. He is the most senior figure targeted since Supreme Leader Ayatollah Ali Khamenei was killed on the first day of the U.S.-Israeli war at the end of February.
A senior Iranian official said Iran’s new supreme leader had rejected de-escalation offers conveyed by intermediary countries.
The U.S. military said on Tuesday it had targeted sites along Iran’s coastline near the Strait of Hormuz because Iranian anti-ship missiles posed a risk to international shipping there.
Larijani’s death and the U.S. military’s strikes on Iranian coastal positions near the strait raised some hopes that the conflict could end sooner, said Mingyu Gao, chief researcher for energy and chemicals at China Futures.
Meanwhile, Libya’s National Oil Corporation said early on Wednesday that flows from the Sharara oilfield were being gradually redirected through alternative pipelines after a fire broke out.
U.S. crude stocks rose by 6.56 million barrels in the week ended March 13, market sources said, citing API figures on Tuesday, well above a rise of about 380,000 barrels seen in a Reuters poll.
Additional reporting by Sam Li in Beijing and Siyi Liu in Singapore; editing by Jacqueline Wong and Jason Neely
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