18.03.202608:44 Forex Analysis & Reviews: Oil Prices Slightly Decreased

Oil prices fell yesterday after Iraq signed an agreement to resume exports through Turkey, bypassing the Strait of Hormuz. The price of Brent crude dropped below $101 per barrel after rising more than 3% on Tuesday, while West Texas Intermediate (WTI) crude approached $93.

It was reported that Iraq reached an agreement with Kurdistan to resume oil exports via a pipeline to the semi-autonomous region, leading to the Turkish Mediterranean port of Ceyhan. This agreement has significant implications for global energy markets. The halt in shipments from Kurdistan, caused by disputes between Baghdad and the regional government, is now resolved. With supplies resuming, gradual market saturation is expected, which should exert downward pressure on oil prices.

The restoration of exports from Iraq is an important step toward stabilizing oil prices. However, there is currently no full confidence in the durability of this agreement. In the past, similar agreements have often faced implementation difficulties, and any new escalation in relations between the central government in Baghdad and the Kurdish authorities could again jeopardize supplies.

It should be understood that redirecting Iraqi oil through Turkey will only partially alleviate concerns about supplies. Oil production in this OPEC member country has fallen to about 1.4 million barrels per day, about one-third of the level before the closure of the Strait of Hormuz.

Meanwhile, the US has used penetrating munitions to target Iranian positions of anti-ship cruise missiles near the Strait of Hormuz, a vital passage that President Donald Trump is eager to reopen. Further escalation of the war occurred after Iran confirmed the death of Ali Larijani, the Secretary of Iran's Supreme National Security Council and a key figure in the country's military leadership.

Despite all of Trump's statements that the war in Iran would end soon, the real actions of the US and Israel currently suggest otherwise, so the slight decrease in oil prices may have a temporary effect.

Regarding the current technical picture for oil, buyers need to overcome the nearest resistance at $100.40. This would allow them to target $106.83, above which it will be quite challenging to break through. The further goal would be the area of $113.36. In the event of a price drop, bears will attempt to take control of $92.54. If they succeed, breaking through this range would deal a serious blow to bulls' positions and could push oil down to a low of $86.67, with the prospect of reaching $81.38.