Roth analysts: Natural gas prices surge, Kurdistan oil exports may resume soon

Investing.com - According to analysts from Roth, resumption of oil exports from Kurdistan may be imminent, a development that could significantly impact global oil markets.

Reports from Reuters and Bloomberg on Sunday indicate that the Iraqi central government and the Kurdish Ministry of Natural Resources, along with major international oil companies operating in Kurdistan, have made significant progress in discussions about restarting Kurdish oil exports.

Iraq's Oil Minister has expressed optimism about the ongoing negotiations, indicating that a final understanding could be reached in the coming days. This could potentially add approximately 300,000 barrels of oil per day (Bopd) to the global oil export markets.

The Kirkuk-Ceyhan oil pipeline, which was shut down in 2014 due to attacks by Islamic State militants, has recently been repaired by Baghdad, enabling it to transit 350,000 Bopd of oil from Kurdistan to Turkey.

However, the Iraq Turkey oil pipeline, capable of handling 450,000 Bopd, remains closed since March 2023 due to disputes over the payment mechanism for oil in Kurdistan between the Kurdish Regional Government (KRG) and the Iraqi central government.

If the estimated additional 300,000 Bopd enters the world markets within the next month, it could assist in maintaining global oil prices and alleviate some of the OPEC+ induced undersupply situation expected until September due to the typical seasonal demand strength seen in the third quarter.

In the US, natural gas prices are on an upward trend along the entire futures curve, despite evidence of delays in new US LNG export projects.

However, despite the positive price action in natural gas futures, gas-focused US E&P companies have underperformed in recent weeks. This underperformance could be attributed to equity investors being more concerned about delays in LNG projects than gas traders/investors.