Brent Slips Below Peak Gains as Iraq Oil Export Deal Offers Temporary Market Relief

Global oil prices declined on Wednesday as renewed export flows from Iraq through Turkey’s Ceyhan port provided temporary relief to a market already strained by escalating geopolitical tensions in the Middle East.

Brent crude oil, the international oil benchmark for Nigerian oil, fell by $2.26, or 2.19 percent to $101.16 per barrel as of early trading. U.S. West Texas Intermediate (WTI) crude also declined by $2.99, or 3.11 percent to $93.22 per barrel.

The decline followed confirmation from Iraq’s Oil Minister, Hayan Abdel-Ghani, that crude exports via the Ceyhan port were scheduled to resume at 0700 GMT on Wednesday.

The resumption is expected to restore at least 100,000 barrels per day of crude supply to the international market, offering a modest easing of supply constraints that have intensified in recent weeks.

Market analysts noted that the development introduced a degree of short-term stability in an otherwise volatile environment.

According to Anh Pham, a senior analyst at LSEG, any additional oil supply re-entering the market is significant under current conditions, prompting prices to adjust downward in response.

Despite the price correction, Brent crude has maintained levels above $100 per barrel for four consecutive sessions, underscoring the sustained impact of geopolitical disruptions on global energy markets.

The broader outlook remains shaped by ongoing hostilities involving Iran, which have significantly disrupted oil flows across the region.

A major point of concern remains the Strait of Hormuz, a critical maritime route through which approximately 20 percent of global oil supply is transported.

The conflict has effectively curtailed operations in the region, contributing to a sharp decline in Iraq’s southern oil production. Output from key oilfields has reportedly dropped by about 70 percent to 1.3 million barrels per day, highlighting the severity of the disruption.

Geopolitical tensions intensified further following confirmation from Iranian authorities that Ali Larijani, a senior security official, was killed in an Israeli airstrike. His death marks one of the highest-profile casualties since the reported killing of Iran’s Supreme Leader at the onset of the U.S.-Israeli conflict with Iran in late February.

In a further escalation, the United States military confirmed it carried out targeted strikes on Iranian coastal installations near the Strait of Hormuz, citing threats posed by anti-ship missile systems to international shipping. These developments have reinforced concerns about prolonged instability in the region and its implications for global oil supply.

While some market participants interpreted the recent military actions as a potential step toward a quicker resolution, others remain cautious.

Analysts warn that the absence of any clear diplomatic breakthrough suggests that oil prices could remain elevated in the near term, with supply disruptions continuing to dictate market direction.

Meanwhile, inventory data from the United States added another layer of complexity to the market outlook.

According to data cited from the American Petroleum Institute (API), U.S. crude oil stockpiles rose by 6.56 million barrels in the week ended March 13, exceeding earlier expectations of a 380,000-barrel increase.

The build in inventories signals softer demand conditions or increased supply within the U.S. market, contributing to downward pressure on prices.

However, the global oil market remains firmly anchored in a high-price environment driven by geopolitical risk. The partial resumption of Iraqi exports, while impactful in the short term, does little to offset the broader supply shock stemming from disruptions in the Middle East.

With no clear signs of de-escalation in the Iran conflict and continued threats to critical oil transit routes, analysts maintain that oil prices are likely to remain volatile.

Market participants are expected to closely monitor developments in the region, particularly any changes affecting the Strait of Hormuz, as well as further updates on global supply flows.

In the near term, the balance between incremental supply recovery and ongoing geopolitical uncertainty will continue to define price movements with Brent crude likely to hold within elevated ranges despite periodic corrections.