Oil extended losses for a fifth straight session on Tuesday, as a preliminary agreement between Iraq and Kurdish regional governments to restart a key oil pipeline heightened concerns over oversupply.
Brent crude futures fell 34 cents, or 0.51%, to $66.23 a barrel by 06:39 GMT, while U.S. West Texas Intermediate (WTI) crude dropped 29 cents, or 0.47%, to $61.99 a barrel. Over the past five trading sessions, Brent and WTI have declined by 3% and 4%, respectively.
“The prevailing theme is still concerns on oversupply, while demand outlook is still uncertain as we approach year-end period. The restart of KRG pipeline has also been putting pressure on prices,” said LSEG senior analyst Anh Pham.
On Monday, Iraq’s federal and Kurdish regional governments reached an agreement with oil companies to resume crude exports via Turkey, according to two oil officials who spoke to Reuters. This arrangement will allow about 230,000 barrels per day (bpd) of Iraqi Kurdistan exports—suspended since March 2023—to resume.
Globally, the oil market is facing the dual challenge of rising supply and slowing demand, influenced by the rapid growth of electric vehicles and economic pressures stemming from U.S. tariffs. In its latest monthly report, the International Energy Agency projected that global oil supply will rise faster this year, with a potential surplus expanding in 2026 as OPEC+ members boost output and non-OPEC production grows.
However, uncertainties persist, including the EU’s consideration of stricter sanctions on Russian oil exports and any further geopolitical tensions in the Middle East.
In the U.S., crude inventories were expected to have increased last week, while gasoline and distillate stocks likely declined, according to a preliminary Reuters poll conducted Monday. Meanwhile, Saudi Arabia’s crude exports in July fell to their lowest level in four months, per data from the Joint Organisations Data Initiative (JODI) released Monday. Iraq, OPEC’s second-largest oil producer, has increased shipments under the OPEC+ agreement, according to state oil marketer SOMO.
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