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Oil prices extended their decline on Tuesday, pressured by expectations of rising supply as OPEC+ prepares for another production increase and exports from Iraq’s Kurdistan region resumed through Turkey, reinforcing concerns of a looming surplus.
By 08:09 GMT, Brent crude futures for November delivery, expiring today, dropped 1.2% to $67.13 per barrel, while U.S. West Texas Intermediate (WTI) crude fell 1.2% to $62.68 per barrel. Both benchmarks had already slumped more than 3% on Monday — their steepest one-day decline since August 1.
OPEC+ to Weigh Additional Output Boost
According to sources cited by Reuters, OPEC+ is likely to approve another production hike of at least 137,000 barrels per day during its meeting on Sunday. The group, led by Saudi Arabia and Russia, has been gradually rolling back deep cuts made in 2023 and 2024, aiming to reclaim global market share.
Analysts, however, warn that repeated supply hikes risk tipping the oil market into surplus, particularly with demand showing signs of weakness. The International Energy Agency recently cautioned that the market could slide into record oversupply by 2026 if OPEC+ continues to prioritize production growth.
Kurdish Oil Exports Resume After 2.5-Year Halt
In a major development, Iraq restarted crude shipments from the semi-autonomous Kurdistan region to Turkey on Saturday, following an interim agreement between Baghdad, the Kurdistan Regional Government, and foreign oil companies. Initial flows are estimated at 180,000–190,000 barrels per day, with potential for further increases in the coming months.
This resumption adds to global supply at a time when traders are already balancing concerns over demand with geopolitical risks stemming from Ukrainian drone strikes on Russian refineries.
Geopolitical and U.S. Domestic Risks
Markets are also weighing the broader geopolitical picture. President Donald Trump secured Israeli Prime Minister Benjamin Netanyahu’s backing for a U.S.-brokered Gaza peace proposal, though Hamas’ position remains uncertain. Analysts suggest that a peace deal could normalize shipping through the Suez Canal, easing a significant risk premium on oil.
Closer to home, fears of a U.S. government shutdown have raised additional demand concerns. ANZ analysts noted that fiscal gridlock in Washington could weigh on consumer and industrial demand for fuel if prolonged.
