G7 Oil Release Eases Prices Amid Middle East Tensions
Oil prices declined on Monday as the Group of Seven (G7) nations planned to release 100 million barrels of crude and diesel from emergency reserves. This move helped ease supply concerns, despite fresh attacks on Saudi energy infrastructure by Yemen’s Iran-backed Houthi group. Brent crude futures dropped 0.8% to $101.5 a barrel, while US West Texas Intermediate crude fell 1.2% to $90 a barrel.
The Houthi attacks targeted Saudi Aramco facilities in Riyadh and the Khurais area, raising concerns over production disruptions. However, Middle Eastern crude exports rose above pre-war levels in late September, offsetting some of the market’s immediate supply worries. Saudi Aramco has also resumed crude loadings at Yanbu and is using ship-to-ship transfers to maintain crude flows despite disruptions.
Saudi Aramco unexpectedly cut its November crude prices for Asian buyers to six-year lows, aiming to protect market share amid elevated transportation costs. The company lowered the official selling price of Arab Light crude for Asia by $3 a barrel, the steepest discount since June 2020. OPEC+ agreed to keep its November oil production targets unchanged, as the conflict delayed a review of members’ production capacity.
The oil market remains tight, with Brent crude still above $100 a barrel due to geopolitical risks. While rising Middle Eastern exports and the G7’s stock release are helping to contain price gains, further attacks on oil infrastructure or shipping could quickly revive supply fears. The direction of crude prices will likely depend on developments around the Strait of Hormuz, Saudi energy facilities, and the broader conflict involving Iran, Saudi Arabia, and the Houthis.