Oil Prices Climb To 7-Year High; Turkey Outage Raises Supply Concerns

Owing to the breakdown of a pipeline from Iraq to Turkey there have been raised concerns on the supply outlook for the oil commodity which has gained in price today for the fourth straight day to a 7-year high. Alongside, there are reported geopolitical tensions brewing in the UAE and Russia.

On Tuesday, state pipeline operator of Turkey said that it stopped oil flows on the Kirkuk-Ceyhan pipeline after an explosion and the reason for the explosion could not be understood. This pipeline transports crude out of Iraq to the Turkey-based Ceyhan port for export.

After gaining over 1.2 percent in the earlier trading session, brent crude futures gained 1.7% or $1.44 to $88.95 per barrel at 0230 GMT. The benchmark contract hit its highest since October 2014 of $89.05. Similarly, after gains to the tune of 1.9% in the previous session on the WTI benchmark, it added another 1.8% to $86.94 per barrel. WTI earlier hit a 7-year high of $87.08.

Morgan Stanley in a cautious outlook for the oil markets for 2022 earlier provided that while the commodity will see softer prices in the first half of the calendar year, it may even be exposed to a triple shortage of investment, inventory and spare capacity in the third quarter.

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