By George Glover
Oil prices were rising again Wednesday after falling in early trade as the market showed signs that it may be developing Iran war fatigue.
Brent international futures climbed 2.2% to $105.74 a barrel and West Texas Intermediate futures edged up less than 0.1% $96.23 a barrel in early trading. The benchmarks rallied on Tuesday after President Donald Trump said U.S. allies had declined to help reopen the Strait of Hormuz.
Not all oil from the Middle East has to flow through that waterway, which has become the war's main focus due to its crucial status as a crude shipping corridor.
Baghdad and Kurdish city Erbil have agreed to export Iraqi oil through the Kurdistan region to the Turkish port of Ceyhan.
"Given the extraordinary circumstances facing the country, and the responsibility we all share to get through this difficult chapter, we have decided to allow oil to flow through the Kurdistan Region's pipeline as soon as possible," Masrour Barzani, prime minister of Iraq's Kurdistan region, wrote in a social-media post on X.
The agreement matters because it signals to the market that there are other ways for crude to flow out of the Middle East.
"Oil is back down a couple of percent seemingly on an Iraq deal with Turkey to resume oil exports through their territory and thus not requiring the Strait of Hormuz," said Jim Reid, macro strategist at Deutsche Bank.
Still, the market is likely to remain jittery as long as the war drags on.
Pressure is building for the Houthi movement, which represents the northern tribal confederations of Yemen, to join the war on Iran's side.
The group looks increasingly likely to take action and is "in a position in which they can exercise considerable leverage and inject further economic costs on the U.S., Israel, and their allies," Dragonfly analysts said in a research note on Wednesday, noting that the Houthis would likely focus on attacking commercial vessels in the Red Sea.
U.S. Central Command said late Tuesday that it had dropped multiple 5,000 pound bombs on missile sites along Iran's coastline near the Strait of Hormuz.
Israel said on Wednesday that it had killed Iran's intelligence chief Esmail Khatib in an overnight strike.
Two people in Tel Aviv died from shrapnel injuries after Iran fired a barrage of missiles at the city overnight.
Write to George Glover at george.glover@dowjones.com
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March 18, 2026 08:47 ET (12:47 GMT)
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