This has somewhat calmed global markets that had feared a supply shortage from the Middle East, reports Reuters.
In the first half of the day, Brent crude futures fell $1.51 (1.46%) to $101.91 per barrel. U.S. WTI crude lost $2.75 (2.86%) to trade at $93.46. Despite this decline, the price of Brent has held above the $100 mark for four consecutive sessions due to the lack of signs of de-escalation of the conflict with Iran.
Iraqi transit
Sources at North Oil Company confirmed that oil pumping through the pipeline has resumed after the Iraqi government and the Kurdistan Regional Government (KRG) reached an agreement on Tuesday.
Iraq plans to pump at least 100,000 bpd. Any additional volume in the market is now critical as production from Iraq’s main southern fields has fallen by 70% (to 1.3 million b/d) due to the closure of the Strait of Hormuz.
Escalating conflict: death of Iran’s security leader
The situation in the region remains tense. On Tuesday, Iran confirmed the death of its security chief Ali Larijani in an Israeli attack. He is the highest official eliminated since the death of Supreme Leader Ali Khamenei in late February.
According to sources, Iran’s new supreme leader has already rejected all de-escalation proposals conveyed by mediating countries. At the same time, the US military has launched strikes on Iranian positions near the Strait of Hormuz to neutralize anti-ship missiles threatening international shipping.
US stockpiles and analysts’ forecasts
Additional pressure on prices came from data from the American Petroleum Institute (API).
During the week ended March 13, oil reserves in the U.S. unexpectedly increased by 6.56 million barrels. This significantly exceeded the forecasts of analysts, who expected an increase of only 380 thousand barrels.
“Oil at $100 remains the new reality, and the crisis around the Strait of Hormuz is not subsiding,” said Anh Pham, senior analyst at LSEG.
Some experts, notably China Futures, are hopeful that active U.S. action on Iran’s coast could lead to a quicker resolution of the conflict, but the market remains highly volatile.
