Oil Prices Rise Amid U.S. Inventory Drawdown and Global Supply Concerns

Oil prices rose on Wednesday after an industry report showed a decline in U.S. crude inventories last week, fueling concerns of tighter supply amid export disruptions in Kurdistan and Venezuela, as well as interruptions to Russian flows.

By 1000 GMT, Brent crude futures were up 40 cents, or 0.6%, at $68.03 a barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 38 cents, or 0.6%, to $63.79 a barrel.

Tamas Varga, an analyst at PVM Oil Associates, said:
“Markets expect global supply growth and stock builds in the final quarter of the year, but recent attention has shifted to the potential introduction of new sanctions on Eastern Europe and Russia.”

He added that delays in resuming Kurdish oil exports and U.S. permitting issues that have limited Chevron’s shipments from Venezuela have added short-term bullish pressure.

Talks to restart exports from Iraq’s Kurdistan region stalled this week, pushing both benchmarks up by more than $1 per barrel on Tuesday. The halt blocked daily pipeline flows of about 230,000 barrels to Turkey after two major producers demanded debt repayment guarantees. Pipeline shipments have been suspended since March 2023.

Meanwhile, U.S. President Donald Trump said Tuesday he believes Ukraine can reclaim all territories seized by Russia, marking a sharp shift in rhetoric in Kyiv’s favor. Earlier this month, the Trump administration urged European Union nations to accelerate their phase-out of Russian oil and gas.

Traders and retailers reported shortages of certain fuel grades in Russia after Ukrainian drone strikes disrupted refinery operations, part of Kyiv’s intensified campaign to curtail Moscow’s export revenues.

In Tehran, Oil Minister Mohsen Paknejad stated that no “new and heavier sanctions” would be imposed on Iranian crude sales, and shipments to China would continue. Negotiations between Iran and European powers are ongoing this week in an effort to prevent the reimposition of U.N. sanctions.

According to American Petroleum Institute (API) data cited by market sources, U.S. crude and gasoline inventories declined last week, while distillate stocks rose.

Official government energy data will be released later on Wednesday. Ahead of the report, a Reuters poll of eight analysts projected a build in crude and gasoline stocks for the week ending September 19, but a draw in distillate inventories.

Overall, the global oil market is bracing for increased supply and slowing demand. In its latest monthly report, the International Energy Agency forecast that world oil output will accelerate this year, with surpluses likely to widen into 2026.