Brent Crude Holds Above $100 Despite Easing Supply Fears
Oil prices dipped on Monday as concerns about an immediate supply shortage eased, but Brent crude remained above $100 due to ongoing geopolitical risks. Brent crude traded around $101.50 a barrel, while West Texas Intermediate (WTI) hovered near $90.10. The pullback followed the Group of Seven’s decision to release 100 million barrels of crude and fuel products over four months, alongside OPEC+’s move to keep November production targets unchanged.
The coordinated release of emergency stocks aimed to cool the most stressed parts of the market, particularly diesel. A significant portion of the release will be diesel, with the first tranche due within 20 days. Governments also pledged to avoid export restrictions, which helped ease some of the pressure on refined fuel prices. However, the impact of this release will depend on how quickly the supply reaches end markets, as refinery outages and disrupted fuel exports have left diesel inventories tight.
The bigger bearish development is the rebound in Gulf crude flows. Data from Kpler showed that Middle East exports averaged about 18.5 million barrels a day by October 1, slightly above the pre-war average of 18 million. On several days in late September, shipments reached between 19.5 million and 22.5 million barrels a day. This recovery has been helped by alternative pipelines, ship-to-ship transfers, and greater traffic through the Strait of Hormuz. However, vessel attacks are increasing, with at least seven incidents around Hormuz since September 28.
OPEC+ added another layer of restraint by keeping November production targets unchanged. Seven core members, including Saudi Arabia and Russia, maintained existing ceilings and will meet again on November 1. Analysts noted that actual OPEC+ production remains well below quota, which helps explain why Brent has stayed above $100 despite stronger exports and emergency releases. The next move in oil prices will depend on whether the recovery in Gulf exports proves durable and if G7 barrels arrive smoothly.