Oil Slips as Kurdistan Crude Exports Start Again, OPEC+ Sets Sights on November Output Increase

Singapore – Oil prices fell on Monday as crude exports from Iraq's Kurdistan region restarted for the first time in two and half years, while expectations of an OPEC+ output increase in November put pressure on supply worries.

Brent crude futures fell 34 cents, or 0.5%, to $69.79 a barrel at 03:30 GMT, while U.S. West Texas Intermediate (WTI) dropped 43 cents, or 0.7%, to $65.29, relinquishing most of last week's advances. Both benchmarks had increased over 4% last week, their largest weekly increase since June, on account of disruptions to Russia's energy exports.

Crude exports restarted on Saturday via a pipeline connecting northern Iraq's Kurdistan region to Turkey's Ceyhan port, following an interim accord between Baghdad, the Kurdistan Regional Government (KRG), and international oil producers that broke a longstanding impasse. Iraqi officials reported flows of 180,000–190,000 barrels per day (bpd), with volumes set to increase to up to 230,000 bpd in months ahead.

The restart follows OPEC+, which includes the Organization of the Petroleum Exporting Countries and their partners, likely endorsing a production increase of at least 137,000 bpd at their Sunday meeting, three sources said. Analysts remark that the alliance has produced close to 500,000 bpd less than agreed, casting aspersions on how rapidly further production can materialize in markets.

Fears of rising production are constraining gains, but a tight near-term outlook has crude in a vice," said Michael McCarthy, CEO of Australia and New Zealand at Moomoo.

Aside from supply dynamics, geopolitical threats are still high. Ukraine's aerial attacks on Russia's fuel infrastructure have interrupted fuel exports, as Moscow went on one of its most intensive onslaughts on Kyiv at the weekend. Meanwhile, sanctions were reimposed on Iran related to its nuclear program by the United Nations, adding to uncertainty in global energy markets.

RBC Capital Markets analysts warned that with OPEC trimming spare capacity, chances of a geopolitical "October surprise" would loom large over market mood.