G7 Oil Release Eases Prices but Geopolitical Tensions Persist
Oil prices showed slight gains in choppy trading on Monday, as crude exports from the Middle East increased and the G7 nations pledged additional supplies. The market remained cautious due to ongoing disruptions linked to the US-Israeli conflict with Iran. Brent crude futures rose by 5 cents to $102.30 a barrel, while US West Texas Intermediate (WTI) crude fell by 49 cents to $90.62 a barrel. Both contracts had earlier dropped over 1% during the session.
The G7 countries agreed on Friday to release 100 million barrels of diesel and crude from emergency reserves, aiming to ease supply concerns. This follows a previous release of 400 million barrels coordinated by the International Energy Agency (IEA) in March. However, the exact amount remaining from that pact is unclear, with IEA Executive Director Fatih Birol stating that about two-thirds had already been released.
Supply tightness persisted, with ICE gasoil futures surging over 4% to $1,409 a metric ton. Analyst Tamas Varga from PVM Oil Associates noted that Chinese product export suspensions were contributing to a tighter supply backdrop in the Far East. Saudi Aramco CEO Amin Nasser warned that crude and refined fuel supplies would likely remain stretched, and refilling global stockpiles could take up to two years.
Geopolitical tensions continued to escalate, with the Houthis claiming attacks on Saudi Aramco sites in response to Saudi-led strikes in Yemen. Meanwhile, OPEC+ delayed a review of 2027 oil output quotas due to the Iran war disrupting expansion projects. Saudi Aramco also cut November crude oil prices for Asia to six-year lows, while Ukraine vowed to continue targeting Russian oil refineries.