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

Oil prices dropped on Monday as rising crude exports from the Middle East and the G7's decision to release emergency oil stocks increased global supplies. Brent crude futures fell 0.71% to $101.59 a barrel, while US West Texas Intermediate crude declined 1.2% to $90.05 a barrel. The G7's agreement to release 100 million barrels of diesel and crude, along with rising Middle Eastern exports, offset concerns over potential damage to Gulf oil infrastructure due to the ongoing US-Israeli conflict with Iran.

Despite attacks on vessels passing through the Strait of Hormuz, shipping data showed that Middle Eastern crude exports exceeded pre-war levels in four of the seven days ending September 30. Tim Waterer, chief analyst at KCM Trade, noted that the G7's decision to tap strategic reserves eased immediate supply anxieties, while Saudi export volumes were returning to pre-war levels, albeit at higher costs and via less efficient routes.

The Houthi rebels claimed to have launched ballistic missiles and drones at Saudi Aramco sites in Riyadh and the Khurais area of Saudi Arabia, in response to Saudi-led strikes in Yemen. Meanwhile, Saudi Arabia's internationally recognized government announced a major military campaign to retake areas controlled by the Houthis. Aramco also unexpectedly cut November crude oil prices for Asia to six-year lows. Brent prices remained above $100 per barrel due to persistent geopolitical tensions and increased attacks on commercial vessels in the Gulf.

OPEC+ delayed a review of 2027 oil output quotas for its members due to disruptions caused by the Iran war, which has thrown future production estimates into uncertainty. In Europe, Ukrainian President Volodymyr Zelenskiy stated that Ukraine would intensify attacks on Russian oil refineries.