Oil Prices Dip as G7 Releases Stocks and Middle East Exports Rise
Oil prices declined on Monday (Oct 5) due to increased crude exports from the Middle East and the G7's decision to release emergency oil stocks. Brent crude futures dropped 72 cents, or 0.71%, to US$101.59 a barrel, while US West Texas Intermediate crude fell US$1.05, or 1.2%, to US$90.05 a barrel. The G7's agreement to release 100 million barrels of diesel and crude from emergency reserves, along with rising Middle Eastern exports, offset concerns about potential damage to Gulf oil infrastructure amid ongoing geopolitical tensions.
Despite attacks on vessels in the Strait of Hormuz, Middle Eastern crude exports surpassed pre-war levels in four of the seven days leading up to the final week of September. Analysts noted that the G7's strategic reserve release eased supply anxiety, while Saudi export volumes appeared to be returning to pre-war levels, even if the shipments were costlier and less efficient. Tim Waterer, chief analyst at KCM Trade, remarked that these factors were enough to subdue oil prices for the time being, despite lingering risks to Gulf energy infrastructure.
The Houthi group claimed responsibility for launching ballistic missiles and drones at Saudi Aramco sites in Riyadh and the Khurais area of Saudi Arabia in response to recent Saudi-led strikes in Yemen. Meanwhile, Yemen's Saudi-backed government announced a major military campaign to recapture areas controlled by the Houthis. Aramco unexpectedly cut November crude oil prices for Asia to six-year lows, and Brent prices remained above US$100 per barrel due to persistent geopolitical tensions and increased attacks on commercial vessels in the Gulf.
OPEC+ postponed a review of 2027 oil output quotas for its members, citing disruptions from the Iran war that have thrown future production estimates into uncertainty. In Europe, Ukrainian President Volodymyr Zelenskiy indicated that Ukraine would intensify attacks on Russian oil refineries.