WASHINGTON (dpa-AFX) - Crude oil moved sharply higher on Tuesday as Iraq's earlier-announced plans to export oil to Turkey from Kurdistan stalled due to payment issues.
WTI Crude Oil was last seen trading up by $1.26 (or 2.02%) at $63.54 per barrel.
Yesterday, Turkey and Iraq agreed to restart oil exports from Kurdistan - a semi-autonomous region of Iraq - via a pipeline to the Turkish coast. This arrangement was supposed to pave the way for around 230,000 barrels per day of oil flooding the markets. Oversupply concerns began to surface, pulling down the prices.
Today, however, debt repayment guarantee issues stalled exports, pacifying traders and reversing earlier losses.
The Middle East is on edge after the September 9 aerial attacks on Doha, Qatar, by Israeli Defense Forces targeting Hamas militants. While Arab nations are standing in solidarity with Qatar, so far no retaliatory measures have been seen.
Unmindful of the condemnation of the attacks by the Arab and Muslim leagues, Israel has avowed to flush out Hamas militants wherever they are.
After straying into Poland's air space weeks before, Russian fighter jets entered Estonia on Friday without permission. To bring Russia to the negotiating table, US President Donald Trump has urged NATO member-nations to stop buying Russian oil and cut off the petrodollar gains Russia makes, a measure Trump believes would compel the country to arrive at a ceasefire with Ukraine.
The NATO alliance has been largely unresponsive to the call. Hungary has ignored the idea as 'something nice to dream' and stated it cannot halt purchasing oil from Russia.
Analysts state that demand for crude oil globally is set to taper off from the third quarter to the fourth quarter of 2025 and once again in the first quarter of 2026. However, production by OPEC+ is rising, as the cartel recently agreed to increase their collective oil production by 137,000 bpd in October, raising excess supply concerns.
The developments in the Middle East and Europe have not resulted in any supply disruption as of yet. If sanctions against Russia by the US and the West are ramped up, oil prices could turn bullish.
On the monetary front, two more rate cuts by the US Federal Reserve following last week's 25 basis point cut is widely anticipated by the markets. If enacted, lower borrowing costs could boost oil demand and support prices on the upside.
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