Oil prices steady amid Iraq air strikes

Monday 11 August 2014 14.17
Iraq is the second biggest producer in the OPEC cartel
Iraq is the second biggest producer in the OPEC cartel

Oil prices steadied today as dealers tracked sustained US air strikes on extremist militants in Iraq who are threatening the crude-rich Kurdish region. 

US benchmark West Texas Intermediate for September delivery rose 15 cents to $97.80 a barrel. Brent crude for September dipped ten cents to stand at $104.92 in London. 

Iraq's Kurdish peshmerga forces on Sunday reclaimed two towns from Islamic State fighters, buoyed by three days of US air strikes to stem the jihadist advance. 

President Barack Obama last week ordered US warplanes back into Iraqi skies to prevent genocide by the jihadists against besieged religious minority groups and prevent an advance on the Kurdish capital Arbil where US personnel are stationed. 

The Islamic State group controls 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. 

Iraq's oil ministry on July 24 said crude exports totalled 2.42 million barrels per day in June, falling far short of a budgeted projection of 3.4 million bpd. 

As the second biggest producer in the OPEC cartel, Iraq's 11% 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. 

Keywords: brent, iraq, oil