Financial Associated Press (Shanghai, editor Xiaoxiang) news, local time on Tuesday (January 18), an important oil pipeline from Iraq to Turkey's Mediterranean port exploded, which added more pressure to the already nervous oil market, and then further pushed up oil prices.
Turkey's state pipeline operator Botas said the fire had been extinguished and cooling operations were underway and that the pipeline would reopen once the "necessary measures" had been taken. At present, the cause of the explosion is not clear.
The pipeline, which connects northern Iraq with Turkey's port of Ceyhan in the Mediterranean Sea, is a key pipeline for Iraq's oil shipments to Europe. The blast is also the latest in a series of supply hits to the oil market in recent months.
Botas noted that the blast occurred in The Turkish province of Kalamalas, about 511 kilometers from the port of Ceyhan. The fire that followed the explosion also spread to the Kahraman Marash-Gaziantep highway. As a result of the fire, many firefighters and ambulances were sent to the area, and the road was closed to two-way traffic.
While it is unclear when the facility will resume, it is expected to once again have a short-term impact on European oil supplies: last year the pipeline was able to carry 450,000 barrels of oil per day.
The pipeline consists of two pipelines running side by side, which can be loaded directly onto tankers after the crude oil is transported to the port of Ceyhan, mainly to refineries in Europe. The oil is exported by the central government of Iraq and the Kurdish local government that controls the northeastern region of the country.
Hot oil market "add another fire"
International oil prices rose again in the short term on Tuesday after the news of the explosion. U.S. WTI crude rose below $86 for the first time since October 2014, while Brent crude is nearing the $89 mark.
International oil prices have been strong off to the start of the new year, with many hedge funds even withdrawing from stock and bond markets in search of returns against the backdrop of rising inflation and rising global interest rate hikes. On Monday, Yemen's Houthi militant groups attacked the United Arab Emirates, and the escalation of hostilities between Iran-aligned Houthi groups and a Saudi Arabian-led coalition also pushed up oil prices.
It is worth mentioning that the U.S. Department of Energy on Tuesday again approved the release of 400,000 barrels of crude oil from the Strategic Petroleum Reserve (SPR) for Atlantic trade and sales. It was the fifth operation since the Biden administration announced it would release the Strategic Petroleum Reserve last November. So far, however, these releases of strategic oil reserves have had a limited effect on repression.
The White House said again on Tuesday that there are still more "tools" to deal with the rise in oil prices, and that it may cooperate with OPEC+ in appropriate circumstances.