Oil prices edged lower during Wednesday's Asian trade, paring back the previous session’s sharp gains after Iraq and Kurdish authorities reached an agreement to resume crude exports via Turkey’s Ceyhan port.
The deal provided some relief to supply concerns in global energy markets, although prices remained elevated amid ongoing geopolitical tensions tied to the Iran conflict.
By 2:55 pm AEDT (3:55 am GMT), Brent crude futures were down $1.61, or 1.6%, to $101.81 per barrel, while U.S. West Texas Intermediate crude fell $2.16, or 2.3%, to $94.05 per barrel.
Despite the pullback, Brent has now held above the $100 mark for four consecutive sessions, following a rally of 3.2% in the previous session.
Iraq’s oil minister, Hayan Abdel-Ghani, said shipments through the Ceyhan port were expected to resume from 0700 GMT on Wednesday, according to Reuters.
However, broader supply risks remain significant. Output from Iraq’s southern oilfields, which account for the bulk of the country’s production, has reportedly dropped by around 70% to approximately 1.3 million barrels per day earlier this month, as the Iran conflict disrupted flows through the strategically vital Strait of Hormuz.
The waterway is a key global chokepoint, handling roughly 20% of the world’s oil supply, and any sustained disruption has the potential to tighten markets further.
Geopolitical tensions escalated this week after Iran confirmed that senior security figure Ali Larijani was killed in an Israeli attack, marking one of the highest-profile casualties since the onset of the conflict.
A senior Iranian official also indicated that the country’s leadership had rejected de-escalation proposals conveyed through intermediary nations.
Meanwhile, the United States military said it had conducted strikes on Iranian coastal positions near the Strait of Hormuz.
On the supply side, fresh data added to bearish pressure. Figures from the American Petroleum Institute showed U.S. crude inventories rose by 6.56 million barrels in the week ended 13 March, significantly above market expectations for a draw of around 600,000 barrels.
