Natural Gas Prices Surge as Kurdistan Oil Exports May Soon Resume

Investing.com – Analysts from Roth suggest that the resumption of oil exports from Kurdistan may be on the horizon, a development that could have significant implications for global oil markets.

Recent reports indicate that substantial progress has been made in negotiations between the Iraqi central government, the Kurdish Ministry of Natural Resources, and major international oil companies operating in the region regarding the restart of Kurdish oil exports.

Iraq’s Oil Minister has expressed confidence in the ongoing talks, suggesting that a final agreement could be reached in the coming days. This development could potentially increase global oil exports by around 300,000 barrels per day (Bopd).

The Kirkuk-Ceyhan oil pipeline, which had been shut down since 2014 due to attacks by Islamic State militants, has recently been repaired by Baghdad. This restoration allows for the transit of 350,000 Bopd of oil from Kurdistan to Turkey.

On the other hand, the Iraq-Turkey oil pipeline, with a capacity of 450,000 Bopd, has remained closed since March 2023. This closure is attributed to disputes over the payment mechanisms for oil in Kurdistan between the Kurdish Regional Government (KRG) and the Iraqi central government.

If the anticipated additional 300,000 Bopd enters the global market within the next month, it may help stabilize global oil prices and address some of the undersupply conditions expected due to typical seasonal demand spikes in the third quarter, influenced by OPEC+ decisions.

In the United States, natural gas prices are currently rising across the entire futures curve, despite indications of delays in new US LNG export projects.

However, gas-focused exploration and production companies in the US have underperformed recently. This trend may be linked to equity investors being more concerned about the delays in LNG projects than gas traders or investors.