Iraq Plans Oil Exports Via Hormuz, Brent Falls to $96
Baghdad says it has reached a deal with Washington on exporting oil through the Strait of Hormuz, and a barrel of Brent fell to $96.6 on Monday morning. The volume and timeline are unknown.
A barrel of Brent fell 1.72 percent to $96.628 at 9:30 a.m. market time on Monday, November 9, while US light crude WTI slipped 1.21 percent to $89.707. News had come from Baghdad the evening before: Iraqi Foreign Minister Fuad Hussein announced a deal with the United States on exporting Iraqi oil through the Strait of Hormuz.
What Did Iraq Agree With Washington?
Hussein announced the deal on Sunday, November 8, in an interview with Al Jazeera. The Strait of Hormuz is a waterway near Oman. The available sources do not say how much oil will move along that route or when it will start, so for now this is an announcement with no volume and no deadline.
We previously reported on the burning tanker near Hormuz and the strikes on Qeshm confirmed by Trump. This time the story is not an attack on the waterway but the continuation of oil exports and the movement of the oil price.
How Much Has Iraq Lost, and What Is Washington Asking?
According to Hussein, Iraq has lost $60 billion because of the war in Iran and the halt in oil exports. The minister also said the US Treasury Department has formally asked Iraq to close its border crossings with Iran, except for two: one in the Kurdistan region and one in the rest of the country.
Baghdad, he said, is in constant dialogue with Washington to prevent damage to the Iraqi economy. Sources differ on the $15 billion to $18 billion a year in trade that the request would affect. B92 reports that this is bilateral trade between Iraq and the US, while Telegraf says it is trade with Iran. The available material does not make it possible to determine which version is correct.
Water for Oil: What Was Agreed With Turkey?
Hussein also addressed the visit of Prime Minister Ali al-Zubaidi to Turkey. Afterward, it was agreed that Turkish companies or the Turkish government will run water projects in Iraq to combat drought. In return, Iraq will continue exporting oil through the Iraq-Turkey pipeline. Flow through that pipeline was raised gradually, from 20,000 and 30,000 barrels up to 260,000 barrels a day.
What Do the Prices Show?
The market report gives no reason for the drop in the oil price, so it cannot be claimed that Hussein’s announcement caused it, even though the timing coincides. European stocks were slightly higher the same morning, led by banks and the mining sector, while technology shares stayed under pressure. Gold rose to $4,092.79 an ounce, and the December futures contract for European gas on the Amsterdam TTF exchange traded at 87.245 euros per megawatt-hour, or about 920 euros per 1,000 cubic meters.
Two figures are still missing from Hussein’s announcement: how many barrels a day could pass through the strait, and from what date.
