(Bloomberg) -- Oil fluctuated as traders assessed the prospect of increased supply from Iraq, President Donald Trump’s latest salvo against China and efforts to end the three-year war in Ukraine.
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Global benchmark Brent steadied above $74 a barrel after tumbling 2.7% on Friday. The US took aim at China with a series of moves involving investment, trade and other issues, raising the risk ties may soon worsen between the two economic rivals.
Meanwhile, Iraq could restart exports from the semi-autonomous Kurdistan region as early as this week should a pipeline to Turkey resume operations, Iraqi Oil Minister Hayyan Abdul Ghani said Monday. A deputy Iraqi minister said the region may ship 185,000 barrels a day, while the ministry maintained exports will remain within OPEC limits.
Crude has had a bumpy start to 2025 as initial gains unraveled, with prices losing all their year-to-date advances. The slide came as Trump’s multiple tariff actions weighed on the outlook for global growth, US stockpiles rose and concerns persisted about lackluster Chinese demand. This month, prices have been mostly stuck in a tight range.
In Europe, Ukrainian President Volodymyr Zelenskiy said he would be ready to step down if it were to guarantee peace in his country. Trump has called for Ukraine to hold elections, and opened talks with Russia. A settlement with Moscow could pave the way for sanctions to be eased, potentially shifting export flows.
“There is still uncertainty on Trump’s next moves in respect to tariffs and concern on the restart of the Iraq-Turkey pipeline,” said UBS Group AG commodities analyst Giovanni Staunovo. Conflicting signals are making it difficult to read the market, “so rather you stay on the sidelines until you get clarity.”
With sentiment softening, OPEC and its allies are now expected to again delay plans to revive production as the market faces a potential surplus. More than 70% of traders and analysts surveyed anticipate that the group will postpone the first in a series of monthly increases scheduled for April.
At the same time, there have been flickers of strength in some parts of the market with the Brent-Dubai exchange for swaps, a measure of the relative value of European and Middle Eastern crude, at its lowest since June. That indicates refiners are still eager to get their hands on the kind of heavy-sour crude barrels the region produces and supply of which has been curtailed due to the OPEC+ cuts.