The ongoing international arbitration between Türkiye and Iraq over crude oil exports from northern Iraq, as well as US data indicating resurgent demand in the country,has led to a rise in oil prices on Wednsday.

International benchmark Brent crude traded at $78.47 per barrel at 10.12 a.m. local time (0712 GMT), a 0.42% increase from the closing price of $78.14 a barrel in the previous trading session.

At the same time, American benchmark West Texas Intermediate (WTI) traded at $73.75 per barrel, a 0.75% rise after the previous session closed at $73.20 a barrel.

Price upticks were triggered by fears of supply disruptions following reports that claimed crude exports from Iraq’s northern Kirkuk fields were halted after Iraq won an arbitration case against Türkiye.

Türkiye’s Energy Ministry on Tuesday expressed its readiness to fulfill the requirements of international law and to make any contribution to the permanent settlement of the conflict between Iraq’s central government (ICC) and the Iraqi Kurdish Regional Government (KRG).

The ministry also disclosed that the ICC ordered Iraq to pay compensation to Türkiye for several oil export violations.

The ministry described the issue as “a reflection of a years-long dispute” between Iraq and the KRG over sharing oil revenues.

Rising demand hopes in the US

An estimated decline in US crude stockpiles also supported higher prices.

The American Petroleum Institute (API) announced late Tuesday its estimate of a drop of nearly 6.07 million barrels in US crude oil inventories, relative to the market expectation of a 1.87 million-barrel decrease.

The US Energy Information Administration’s (EIA) data on oil stocks will be announced later on Wednesday, and if the increase in stock levels is confirmed, prices are expected to increase further.

Furthermore, after the US Federal Deposit Insurance Corporation announced Monday that the First Citizens Bank had agreed to buy SVB’s deposits and loans, hopes of a resolution to the US banking system crisis boosted bullish oil prices.