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Oil prices rose in Asia today as dealers monitor sustained US air strikes on extremist militants in Iraq who are threatening the crude-rich Kurdish region, analysts said.
US benchmark West Texas Intermediate crude for September delivery rose 32 cents to $97.97, while Brent crude for September delivery gained 23 cents to $105.25 in mid-morning trade.
“Investors take comfort in the knowledge that insurgents will be contained in northern Iraq, away from the oil fields in Kurdistan,” said Desmond Chua, market analyst at CMC Markets in Singapore.
Insurgents attack
The so-called Islamic State group control large swathes of Iraq’s north and west, and have declared a “caliphate” in those areas.
The sweeping offensive began on June 9, preventing Baghdad from exporting oil via a pipeline to Turkey and by road to Jordan.
Crude oil exports
Iraq’s oil ministry had on July 24 said crude oil exports totalled 2.42 million barrels per day in June, falling far short of a budgeted projection of 3.4 million bpd.
As the number-two producer in the OPEC cartel, Iraq’s 11 per cent of proven world reserves plays a key role on world markets and prices after violence disrupted oil exports from Syria and Libya.
The dip in exports adds to the woes of Iraq, which is heavily dependent on oil revenues while spending more on military equipment to battle the Islamic State group.
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