Oil Dips as G7 Releases Stocks and Middle East Exports Rise
Oil prices declined on Monday as increased crude exports from the Middle East and a decision by the Group of Seven (G7) nations to release oil stocks from emergency reserves added to global supplies. Brent crude futures dropped by 72 cents, or 0.71%, to $101.59 a barrel, while US West Texas Intermediate (WTI) crude fell by $1.05, or 1.2%, to $90.05 a barrel. The G7's agreement to release 100 million barrels of diesel and crude came after pressure from US President Donald Trump, offsetting concerns about potential damage to Gulf oil infrastructure due to the ongoing US-Israeli war with Iran.
The rise in Middle Eastern crude exports, which surpassed pre-war levels in four of the seven days of the final week of September, further contributed to the supply increase. Despite attacks on vessels in the Strait of Hormuz, shipping data indicated higher export volumes. Analysts noted that the G7's decision to tap strategic reserves eased immediate supply concerns, while Saudi export volumes appeared to be returning to pre-war levels, albeit at higher costs and via less efficient routes.
Geopolitical tensions persisted, with the Houthis claiming to have launched ballistic missiles and drones at Saudi Aramco sites in Riyadh and the Khurais area. Saudi Arabia had not confirmed these attacks as of Monday. Meanwhile, Yemen's Saudi-backed government announced a major military campaign to recapture areas controlled by the Iran-backed Houthis. Aramco also unexpectedly cut November crude oil prices for Asia to six-year lows.
Brent prices remained above $100 per barrel due to ongoing geopolitical tensions and increased attacks on commercial vessels in the Gulf. OPEC+ delayed a review of 2027 oil output quotas for its members, citing disruptions from the Iran war, which has thrown estimates of future production potential into uncertainty. In Europe, Ukrainian President Volodymyr Zelenskiy indicated that Ukraine would intensify attacks on Russian oil refineries.