Oil price decline on Tuesday was driven by concerns over rising supply following the announcement of a new export deal between Iraq's central government, its Kurdish region, and oil companies.
Brent crude was trading at $65.69 per barrel at 9.30 a.m. local time (0630 GMT), down 0.57% from the previous close of $66.07.
US benchmark West Texas Intermediate (WTI) decreased by 0.53% to $61.93 from $62.26 in the prior session.
Iraq's Kurdish Regional Administration (KRG) said a tripartite agreement would be signed between Iraq's central government, the regional administration and oil companies to resume crude exports.
KRG spokesperson Peshawa Hawramani told reporters that the long-standing dispute over oil exports had been addressed. Hawramani said the regional government, the central government and producing companies had reached an agreement and would sign a three-party contract.
The Paris-based international arbitration court halted oil exports from the KRG and Kirkuk through Türkiye's Ceyhan port on March 25, 2023, after a lawsuit filed by the Iraqi central government.
On June 25, KRG Prime Minister Masrour Barzani criticized the suspension of crude exports from the region via Ceyhan due to the lawsuit brought by Baghdad.
Analysts noted that supply glut fears and uncertainty over demand outlook persist in the markets, while the reactivation of the KRG pipeline is adding downward pressure on prices.
Meanwhile, Iraq announced it had increased oil exports after gradually rolling back voluntary production cuts under the OPEC+ agreement.
The country's State Oil Marketing Organization (SOMO) said exports averaged 3.38 million barrels per day (bpd) in August and were expected to range between 3.4 million and 3.45 million bpd in September.
Market players are also awaiting the American Petroleum Institute's forecast for US commercial crude inventories later in the day for clues on demand in the world's top oil consumer.
Official inventory data from the US Energy Information Administration will be released on Wednesday.
By Humeyra Ayaz
Anadolu Agency
Energy@aa.com.tr
