Brent crude prices fell below £109 per barrel on Tuesday erasing all gains seen since the militant group known as The Islamic State (previously known as ISIS) seized Mosul on 10th June.
Fears over potential disruption to oil production from the OPEC producer sent Brent crude prices to a high of $115.71 per barrel over a week later. Since then no oil production in the south of Iraq has been affected while the Kurdish are increasing exports of crude from the north.
It hasn’t all been about Iraq however. Oil prices have also dropped on speculation that Libya will be able to restore exports after rebel groups returned two oil terminals back to government control. Although the direct risk of disruption to oil facilities in Iraq appears to have diminished political uncertainty remains rife.
The current situation in Iraq represents part of a broader trend towards geopolitical related outages in the oil market. It won’t be long before the oil market has a new supply concern to focus on.