Oil prices have increased once more. This time the cause is a new important fundamental factor - a conflict in the northern part of Iraq where Iraqi armies clashed with Kurdish people.
The Kurdish region between Turkey and Iraq has long been a place of unrest, as Kurdish people try to exist as a separate state. This September they held a referendum and voted in favor of complete independence, which angered Iraq. Now there is ongoing fighting on Kurdish territory.
Iraq is the second most important exporter of oil in OPEC, after Saudi Arabia. However, this oil passes through Kurdish land and Turkey (where the president had threatened to cut off imports from the Kurdish region for the same concerns as Iraq). As a result of the conflict, it is expected that the exports of oil will temporarily be interrupted.
The Brent crude touched $57.75, white the WTI was at $51.95. However, sharp increases are unlikely as the Kurdish authorities have shown a readiness to fight away from oil and gas facilities.
The crude oil price was also boosted thanks to Trump’s decision not to certify that Iran is complying with the international deal regarding its energy.
