Oil Prices Dip Amid Rising Middle East Exports and G7 Supply Pledge

Oil prices dropped by around $2 on Monday as Middle Eastern crude exports rose and the G7 nations committed to releasing additional supplies. Brent crude futures fell $1.93, or 1.89%, to $100.32 a barrel, while US West Texas Intermediate crude declined $1.68, or 1.84%, to $89.43. Despite risks from attacks on vessels in the Strait of Hormuz, shipping data showed that Middle Eastern crude exports exceeded pre-war levels in the last week of September.

The G7 countries agreed on Friday to release 100 million barrels of diesel and crude from emergency reserves and to avoid energy export restrictions. However, analysts remained skeptical about how much of the pledged oil would come from the remaining volumes of the International Energy Agency's 400 million-barrel emergency release announced in March. IEA Executive Director Fatih Birol stated that about two-thirds of that agreement had already been released.

BP CEO Meg O'Neill announced that the company's refineries are being adjusted to produce more diesel. Analysts warned that geopolitical risks, including ongoing conflicts between Saudi Arabia and Iran-backed Houthis, would keep the oil market under pressure. Saudi Aramco CEO Amin Nasser predicted that refilling global stockpiles after emergency withdrawals could take up to two years.

US Strategic Petroleum Reserve inventories dropped to 283 million barrels last week, the lowest since 1982. Fighting in Yemen continued to raise concerns about production in the region. OPEC+ delayed a review of 2027 oil output quotas due to disruptions caused by the Iran war. Additionally, Aramco unexpectedly cut November crude oil prices for Asia to six-year lows.