introduction: Oil falls after Iraq signs deal to resume exports via Turkey

 

From 2h ago

07.39 GMT

https://www.theguardian.com/business/live/2026/mar/18/oil-stock-markets-iraq-deal-exports-turkey-inflation-central-bankers-news-updates

 

introduction: Oil falls after Iraq signs deal to resume exports via Turkey

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

 

The conflict in the Middle East continues to grip the markets, as ship traffic through the strait of Hormuz continues to be slowed by the crisis.

 

But this morning, oil has dropped after Iraq reportedly struck a deal with Turkey to resume oil exports through their territory, having agreed with Kurdistan to pump oil through a pipeline in its region.

 

According to Reuters, crude exports from Iraq’s Kirkuk fields by pipeline to Turkey’s Ceyhan port have resumed, giving an alternative route rather than braving the strait.

 

But, the rerouting of some Iraqi oil through Turkey will only partially relieve supply concerns, Bloomberg reports, adding that Iraq’s oil production has fallen to about 1.4 million barrels a day — about a third of levels before the closure of Hormuz.

 

Brent crude is down 1.55% this morning at $101.80 a barrel, while US crude is almost 3% lower at $93.42 a barrel.

 

Ipek Ozkardeskaya, senior analyst at Swissquote, says:

 

This morning, oil is sharply down on news that Iraq signed a deal to resume oil exports via Turkey, bypassing the Strait of Hormuz, while Saudi Arabia is also rerouting exports toward the Red Sea. The region is reorganizing, preparing for the possibility of a prolonged conflict.

 

Restoring oil exports fully will take time, and we may soon see physical-market shortages — likely keeping oil prices under upward pressure. Yet, as flows adapt to alternative routes, the initial surge in oil prices seen at the start of the war could ease.

 

Stock markets are responding to this too – Japan’s Nikkei has gained 2.8% this morning, while South Korea’s KOSPI has jumped by 5.7%.

 

Investors are also hoping that central bankers will ‘look through’ the approaching spike in inflation, rather than reacting by raising interest rates. We’ll hear from America’s top central banker, Jerome Powell, tonight, when the Federal Reserve is widely expected to leave US interest rates on hold.

 

Jim Reid of Deutsche Bank reports:

 

There is also a bit more calm in markets at the moment and a small hint that there is a decoupling from the price of oil as the last 24 hours have seen more positive risk markets and lower [bond] yields.