Oil prices up after President Obama authorizes air strikes on Iraqi targets
August 9, 2014, 12:01 am TWN
SINGAPORE--Oil prices rose in Asia Friday after U.S. President Barack Obama said he had authorised air strikes against Sunni extremist militants in key crude producer Iraq.
U.S. benchmark West Texas Intermediate for September delivery rose 71 cents to US$98.05 while Brent for September gained 96 cents to US$106.40 in afternoon trade.
Obama in an address late Thursday said he ordered the air strikes to prevent “genocide” by the so-called Islamic State fighters against the besieged Yazidi minority in Iraq's north.
Islamic State insurgents now control large swathes of Iraq's north and west. The sweeping offensive began on June 9, preventing Baghdad from exporting oil via a pipeline to Turkey and by road to Jordan.
Iraq's oil ministry on July 24 said crude exports totaled 2.42 million barrels per day in June, falling far short of a budgeted projection of 3.4 million bpd.
As the number-two producer in the OPEC cartel, Iraq's 11 percent of proven world reserves plays a key role on world markets and prices after violence disrupted oil exports from Syria and Libya.
The dip in exports adds to the woes of Iraq, which is heavily dependent on oil revenues while spending more on military equipment to battle the Islamic State group.