Photo by Alimurat Üral
Oil prices experienced a decline of over 1% on Friday, marking the potential for their first monthly decrease since November. This downturn occurred as markets reacted to tariff threats from Washington and Iraq’s decision to recommence oil exports from the Kurdistan region.
Investor sentiment was further impacted by the uncertainty surrounding OPEC’s plans to resume production in April, as well as ongoing negotiations aimed at resolving the conflict in Ukraine. By 1410 GMT, the more actively traded May Brent crude futures had decreased by 81 cents, or 1.1%, settling at $72.76 per barrel. Meanwhile, U.S. West Texas Intermediate crude futures were priced at $69.55 per barrel, down 80 cents, also reflecting a 1.1% drop. The front-month Brent contract, which is set to expire on Friday, traded at $73.10, down 94 cents.
Both benchmarks are poised to record their first monthly decline in three months. According to a statement from the Iraqi oil ministry, Baghdad is expected to announce the resumption of oil exports from the semi-autonomous Kurdistan region via the Iraq-Turkey pipeline. Iraq plans to export 185,000 barrels per day through the state oil marketer SOMO, with plans for a gradual increase in that volume.
However, despite the anticipated announcement, eight international oil companies operating in the Kurdistan region indicated that they would not resume exports on Friday due to a lack of clarity regarding commercial agreements and assurances of payment for both past and future exports.
The resumption of exports prompts inquiries regarding Iraq’s adherence to its OPEC+ commitments, particularly as it has consistently produced above its designated quota, stated Harry Tchilinguirian, head of research at Onyx Capital Group. He further noted that if OPEC+ postpones the return of 120,000 barrels per day from voluntary cuts starting in April, Iraq’s production increase will surpass that limitation. OPEC+ is currently deliberating whether to proceed with an increase in oil output as scheduled in April or to maintain the current levels, as its members attempt to assess the global supply situation, according to eight sources within the organization.
Economists from Fitch’s BMI research division indicated that market participants are finding it challenging to evaluate the effects of the various energy-related policy announcements made by the Trump administration this month.
On Thursday, U.S. President Donald Trump announced that his proposed 25% tariffs on goods from Mexico and Canada would take effect on March 4, alongside an additional 10% duty on imports from China. Ole Hansen, head of commodity strategy at Saxo Bank, remarked that traders are mitigating risks in light of the increased volatility resulting from Trump’s escalation of the tariff conflict, particularly concerning China, which has significantly heightened concerns regarding global demand. A trade war could potentially hinder global economic growth, trigger inflation, and consequently dampen crude oil demand. A Reuters survey indicated that Brent crude is expected to average $74.63 per barrel in 2025, while U.S. crude is anticipated to average $70.66.
Oil prices increased by over 2% on Thursday as supply concerns reemerged following President Trump’s revocation of a license previously granted to U.S. oil giant Chevron for operations in Venezuela
