Crude Oil Prices Drop as OPEC+ Plans Output Hike and Iraq Resumes Kurdish Exports

Crude oil prices fell sharply in Asian trading on Monday amid growing concerns about a potential global oil surplus. The decline came after reports that OPEC+ is planning another production increase in November and Iraq resumed oil exports from its Kurdish region to Turkey.

Crude Oil Prices Slide

As of 21:41 ET (01:41 GMT),

• Brent crude futures for November delivery were down 0.8% at US$69.58 per barrel.
• West Texas Intermediate (WTI) futures fell 0.9% to US$65.16 per barrel.

This comes after both benchmarks gained nearly 5% last week, supported by fears of supply disruptions from Russia following Ukrainian drone attacks on key energy facilities.

OPEC+ May Raise Production Again

According to a Bloomberg report, OPEC+, led by Saudi Arabia, is expected to approve another output hike at its meeting on October 5.

• The group could increase production by at least 137,000 barrels per day, on top of the rise already planned for October.
• This move would continue a series of production increases this year, reversing the deep cuts made in 2023 and 2024.
• The International Energy Agency (IEA) has warned that if OPEC+ continues this policy, the market could face a record supply surplus by 2026, as production growth begins to outpace global demand.

Iraq Resumes Kurdish Oil Exports

Adding more pressure to prices, Iraq restarted oil shipments from the semi-autonomous Kurdish region to Turkey on Saturday.

• Initial flows were 180,000 to 190,000 barrels per day and are expected to increase further in the coming months, according to Iraq’s oil ministry.
• The restart follows an interim agreement between Baghdad, the Kurdistan Regional Government (KRG), and foreign oil companies.
• Exports through the Kirkuk-Ceyhan pipeline had been halted since March 2023 due to disputes over revenue-sharing and control.

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Conclusion

The combination of OPEC+ planning higher output and Iraq resuming Kurdish oil exports has raised fears of a growing global oil glut. While last week’s price gains were driven by supply concerns linked to Russia, the latest developments suggest that rising production could outweigh these risks.

Investors will closely watch the October 5 OPEC+ meeting for signals on future production plans and their impact on the global oil market.

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