Finance
Oil Prices Drop as U.S. Crude Inventories Show an Increase
Published by Global Banking & Finance Review®
Posted on March 18, 2026
3 min readLast updated: March 18, 2026
Quick Summary
Oil prices dipped on March 18 after U.S. crude inventories rose more than expected, while supply developments from Iraq and Libya added context amid Middle East tensions affecting markets.
Oil prices ease as Iraqi and Kurdish authorities agree to export deal
Market Reactions and Geopolitical Developments
By Sam Li and Siyi Liu
Oil Price Movements Following Export Deal
BEIJING/SINGAPORE, March 18 (Reuters) - Oil prices eased on Wednesday to pare back some of Tuesday's sharp gains after the Iraqi government and Kurdish authorities reached a deal to resume oil exports via Turkey's Ceyhan port, providing modest relief to concerns about Middle East supplies.
But with no signs of a de-escalation of the Iran conflict, which has left oil exports from the Middle East largely halted, Brent futures prices have settled above $100 per barrel for the prior four consecutive sessions.
Brent and WTI Futures Update
After rising more than 3% on Tuesday, Brent futures edged back 67 cents, or 0.65%, to $102.75 a barrel by 0209 GMT on Wednesday. U.S. West Texas Intermediate crude dropped $1.18, or 1.23%, to $95.03.
Iraqi Oil Exports and Production
Resumption of Flows Through Ceyhan
Iraqi's oil minister Hayan Abdel-Ghani said oil flows from Ceyhan were expected to start at 0700 GMT on Wednesday, according to state media. Two oil officials said last week that Iraq was seeking to pump at least 100,000 barrels per day of crude through the port.
Market Analyst Perspective
"While it all helps and buys some time, the 100,000 bpd is not a huge game changer as Iraq has still lost about two million barrels per day," said IG market analyst Tony Sycamore.
Impact of Iran Conflict on Iraqi Output
Oil production from Iraq's main southern oilfields, where most of its crude is produced and exported, has plunged 70% to just 1.3 million bpd, sources said on March 8, as the Iran conflict effectively shut the vital Strait of Hormuz through which some 20% of global oil passes.
Iran Conflict and Regional Tensions
Key Developments in the Iran-Israel Conflict
Iran confirmed on Tuesday that its security chief Ali Larijani had been killed in an Israeli attack. He is the most senior figure targeted since the U.S.-Israeli war's first day.
A senior Iranian official said Iran's new supreme leader had rejected de-escalation offers conveyed by intermediary countries.
U.S. Military Actions and Market Sentiment
The United States military said Tuesday it had targeted sites along Iran's coastline near the Strait of Hormuz because Iranian anti-ship missiles posed a risk to international shipping there.
Larijani's death and the U.S. military's strikes on Iranian coastal positions near the Strait of Hormuz raised some hopes that the conflict could end sooner, said Mingyu Gao, chief researcher for energy and chemicals at China Futures.
U.S. Crude Stockpiles and Market Expectations
API Figures and Reuters Poll
U.S. crude stocks rose by 6.56 million barrels in the week ended March 13, market sources said, citing API figures on Tuesday.
A Reuters poll showed that U.S. crude oil stockpiles were expected to have risen by about 380,000 barrels in the week to March 13.
(Reporting by Sam Li in Beijing and Siyi Liu in Singapore; Editing by Stephen Coates and Neil Fullick)
Key Takeaways
- •U.S. crude stocks surged ~6.56 million barrels versus consensus for only ~380,000 barrels, prompting Brent to fall $1.15 and WTI $1.54 by early GMT on March 18.
- •Iraq and Kurdistan have reached an agreement to restart exports via the Ceyhan pipeline starting March 18, easing long‑standing export bottlenecks.
- •Libya’s Sharara field gradually resumed flows via alternative pipelines after a fire, while Iran‑related geopolitical developments continue to inject volatility into global oil markets.
Frequently Asked Questions about Oil prices drop as U.S. crude inventories show an increase
1Why did oil prices fall on Wednesday?
Oil prices dropped due to an increase in U.S. crude inventories and shifting global supply dynamics.
2How much did U.S. crude inventories rise?
U.S. crude inventories rose by 6.56 million barrels in the week ended March 13.
3What is the latest on Iraq and Libya's oil supply?
Iraq resumed oil exports to Turkey, while Libya redirected flows from a damaged oilfield without affecting production.
4What were the Brent and WTI crude price changes?
Brent dropped $1.15 to $102.27 a barrel, while WTI fell $1.54 to $94.67 a barrel.
