Oil Prices Dip as G7 Releases Stocks and Middle East Exports Rise

Oil prices fell on Monday as increased crude exports from the Middle East and a decision by the Group of Seven (G7) nations to release emergency oil stocks added to global supplies. Brent crude futures dropped 66 cents, or 0.65%, to $101.59 a barrel, while US West Texas Intermediate (WTI) crude declined 95 cents, or 1.03%, to $90.12 a barrel.

The G7's decision to release 100 million barrels of diesel and crude from emergency reserves, along with a pledge to avoid energy export restrictions, contributed to the decline in oil prices. This move came after shipping data showed that Middle Eastern crude exports rose above pre-war levels in four of the seven days of the final week of September, despite attacks on vessels in the Strait of Hormuz.

Tim Waterer, chief analyst at KCM Trade, noted that the G7's decision has eased immediate supply concerns, while Saudi export volumes are returning to pre-war levels, albeit at higher costs and through less efficient routes. This combination has subdued oil prices, even as risks of further damage to Gulf energy infrastructure remain.

Tensions in the region persisted, with the Houthis claiming to have launched ballistic missiles and drones at Saudi Aramco sites in response to recent Saudi-led strikes in Yemen. Meanwhile, Saudi Aramco unexpectedly cut November crude oil prices for Asia to six-year lows. Brent prices, however, remained above $100 per barrel due to geopolitical tensions and increased attacks on commercial vessels in the Gulf, according to ING analysts.

OPEC+ delayed a review of 2027 oil output quotas due to disruptions caused by the Iran war, which has thrown future production estimates into uncertainty. Additionally, Ukrainian President Volodymyr Zelenskiy announced plans to intensify attacks on Russian oil refineries.