Oil Prices Drop as Middle East Exports and G7 Reserve Release Ease Supply Fears

Oil prices dipped on Monday as rising exports from the Middle East and the G7’s decision to release emergency reserves eased supply concerns. Brent crude futures fell 66 cents, or 0.65%, to $101.59 a barrel, while US West Texas Intermediate crude dropped 95 cents, or 1.03%, to $90.12. These declines erased most of the gains from the previous week, with WTI ending last week 1.6% lower.

The G7’s planned release of 100 million barrels of diesel and crude, announced on Friday, added pressure on prices. Shipping data showed that Middle Eastern exports surpassed pre-war levels on four of seven days in late September, despite attacks on vessels in the Strait of Hormuz. Tim Waterer, chief analyst at KCM Trade, noted that the G7 decision reduced immediate supply concerns and that Saudi export volumes appeared to be returning to pre-war levels, though with higher costs and less efficient transport routes.

Geopolitical tensions in the region continued to support oil prices above $100 a barrel. ING analysts highlighted that attacks on commercial vessels in the Gulf and the risk of further damage to energy infrastructure remained key concerns. The Houthis claimed responsibility for launching ballistic missiles and drones at Saudi Aramco sites, including facilities in Riyadh and Khurais, linking the attacks to Saudi-led strikes in Yemen. Saudi Arabia did not confirm these reports.

Yemen’s Saudi-backed government launched a major campaign to retake areas controlled by the Iran-backed Houthis. Meanwhile, Aramco unexpectedly cut November crude prices for Asia to six-year lows. OPEC+ delayed a review of 2027 output quotas due to disruptions caused by the Iran war.