Oil prices are falling this morning after the signing of a agreement between Iraq and Kurdish authorities for the resumption of exports through the Turkish port of Ceyhan, thus avoiding the Strait of Hormuz. The redirection of Iraqi oil through Turkey will only partially alleviate supply problems, as Iraqi production has fallen to about 1,4 million barrels a day, about a third of pre-Hormuz field levels.
However, Brent crude expiring in May fell by 2,8%. below $101 a barrel, After gaining more than 3% yesterday, West Texas Intermediate WTI for April delivery fell 4,2% to $92,14 a barrel. The more active May contract fell 4,1% to $91,64 a barrel. Brent crude has rallied nearly 70% this year, largely following the initial U.S. and Israeli attack on Iran late last month.
According to Abdul-Ghani's previous statements, Iraq has the capacity to ship at least 150.000–200.000 barrels per day from Kirkuk, as well as 210.000 barrels per day from Kurdistan, via the northern pipeline. Currently, according to the minister, Iraq produces 1,3–1,4 million barrels per day, down from 4,3 million before the Hormuz closure.
The price surge – with the diesel in the United States that this week it surpassed $5 a gallon at the pump – will be carefully examined by central banks around the world in defining the monetary policies. The officials of theFederal Reserve The US government will present its thoughts this evening at the end of the FOMC meeting, while no changes to interest rates are expected.
Meanwhile, on the geopolitical front, Trump has abandoned pressure on allies to participate in the war against Iran, after having criticized them for rejecting his appeals. Analysts see this retreat by their allies as a sign of hope that the conflict will not escalate further, helping to improve market sentiment. Trump also repeated his mantra that the conflict would soon end.
Nevertheless, The United States and Israel continued their attacks, without any clarity on the conclusion of the operations. In the last few hours, Israel announced that it had killed the Iranian security chief, Ali Larijani, Trump threatened to extend the attacks toKharg Island, Iran's main export hub, while the Gulf countries continued to suffer attacks by drones sent by Iran. United States they used armor-piercing ammunition to hit Iranian positions of anti-ship cruise missiles near the Strait of HormuzThe killing of Larijani is seen by analysts from two different points of view: it could be positive news, but it could also make Iran even more determined to cut off oil flows.
“With hostilities still ongoing, the number of closed rigs increasing daily and the Strait technically closed, we remain of the view that Brent will remain in a new higher price range, between 95 and 110 dollars”, he said to Bloomberg “Should there be a major refinery accident or confirmation of further mining activity in the Strait, we would expect this price range to extend further by another $10-$20,” he added.
