Global oil prices retreated on Monday as markets digested the twin impact of renewed Iraqi Kurdish crude exports and expectations of another production hike from the OPEC+ alliance.
Brent crude futures slipped 43 cents, or 0.6%, to trade at $69.70 a barrel as of 06:30 GMT, reversing gains from late last week when prices hit their highest level since July.
Meanwhile, U.S. West Texas Intermediate crude declined 49 cents, or 0.8%, to $65.23, undoing much of Friday’s rally.
Market sentiment cooled after Iraq’s Kurdistan region restarted crude oil shipments through Turkey, ending a two-and-a-half-year suspension.
An interim agreement between Baghdad, the Kurdistan Regional Government, and international oil companies has allowed flows of around 180,000 to 190,000 barrels per day to Turkey’s Ceyhan port.
Officials noted volumes could increase to 230,000 bpd in the coming months, easing some supply concerns in international markets.
The restart follows pressure from Washington, which has been lobbying for higher exports to offset disruptions from Russia’s war in Ukraine and instability in the Middle East.
At the same time, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) appear poised to approve another supply hike when they meet on Sunday.
According to sources close to the talks, the group is considering an increase of at least 137,000 bpd in November, following a trend of cautiously boosting output to claw back global market share.
However, analysts caution that the headline numbers may be misleading. Despite setting ambitious targets, OPEC+ has consistently fallen short of its production quotas by nearly 500,000 bpd, partly due to underinvestment and operational challenges in member states.
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This shortfall has prevented markets from tipping into surplus, even as new supply sources come online.
Michael McCarthy, CEO of investor platform Moomoo Australia and New Zealand, explained that traders remain torn between short-term tightness and the looming risk of oversupply.
“Ongoing fears of production increase are limiting gains, but a tight near-term outlook has crude prices in a vice as the trading week begins,” he noted.
Beyond supply dynamics, geopolitical tensions continue to cast a long shadow. RBC Capital Markets analysts warned that October could bring fresh volatility, with ongoing conflicts in Russia and Iran threatening global energy stability.
“The summer narrative of Q4 oversupply is giving way to a reality where geopolitical risk premiums are creeping back into oil prices,” they said.
The backdrop underscores the fragility of energy markets. Just last week, Brent and WTI rose more than 4% — their biggest weekly gain since June — after Ukrainian drone strikes damaged Russian fuel facilities, tightening export flows.
Moscow responded with one of its most sustained assaults on Kyiv since the full-scale war began, adding further uncertainty to energy supplies.
As OPEC+ prepares its next move and regional conflicts intensify, traders and policymakers alike are bracing for a volatile final quarter of 2025 in global oil markets.
