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Oil market balances supply fears from Iraq with global demand concerns

Oil market balances supply fears from Iraq with global demand concerns

Web Desk
Jul 18, 2025

SINGAPORE: Oil prices held mostly steady on Friday, as worries about supply disruptions from drone attacks on Iraqi oilfields were balanced by fears of weaker demand due to uncertain US trade policy.

As of 0239 GMT, Brent crude slipped 4 cents to trade at $69.48 a barrel, while US West Texas Intermediate (WTI) fell 3 cents to $67.51.

Prices had risen by around $1 a barrel on Thursday, supported by reports of drone strikes on oil infrastructure in the semi-autonomous Kurdistan region of northern Iraq. According to energy officials, the attacks have knocked out between 140,000 and 150,000 barrels per day of oil production, over half of the region’s usual output of 280,000 bpd.

No group has claimed responsibility, but officials suspect Iran-backed militias were behind the assaults, which have continued for four consecutive days.

Seasonal travel demand has also helped keep prices supported. JPMorgan analysts noted in a research report that global oil demand averaged 105.2 million bpd in the first half of July — up by 600,000 bpd from the same period last year and broadly in line with forecasts.

However, traders remain cautious as uncertainty lingers over the final shape of US tariff policy, which may not be settled until after August 1. This is adding to concerns about a slowdown in demand growth. At the same time, major oil producers are preparing to unwind supply cuts, which could further weigh on the market as summer demand in the Northern Hemisphere tapers off.

For the week, both Brent and WTI are set to post declines of more than 1 per cent.

“Near-term oil fundamentals remain supportive, with the market set to remain fairly tight through this quarter before becoming better supplied towards the end of the year,” ING analysts said in a note.

Meanwhile, Iraq’s federal government announced on Thursday that oil exports from Iraqi Kurdistan will resume via a pipeline to Turkey after a two-year suspension, even as the region deals with the aftermath of the drone attacks.