Oil Prices Drop as Middle East Exports and G7 Reserves Boost Supply

Oil prices dropped on Monday as rising crude exports from the Middle East and the G7's decision to release emergency reserves added to global supplies. Brent crude futures fell 0.65% to $101.59 a barrel, while US West Texas Intermediate (WTI) crude declined 1.03% to $90.12 a barrel. The G7's announcement to release 100 million barrels of diesel and crude, along with Middle Eastern exports exceeding prewar levels, contributed to the price decline.

Analysts noted that the G7's move eased immediate supply concerns, while Saudi crude export volumes were returning to prewar levels, albeit at higher costs and through less efficient routes. Tim Waterer of KCM Trade emphasized that these factors were capping prices, despite ongoing risks of damage to Gulf energy infrastructure.

Tensions in the region remained high, with the Houthis claiming attacks on Saudi Aramco facilities in response to Saudi-led strikes in Yemen. Saudi Arabia launched a major military campaign to retake Houthi-controlled areas, while Aramco unexpectedly cut its November crude prices for Asia to the lowest level in six years.

Geopolitical tensions and attacks on commercial vessels in the Gulf kept Brent prices above $100 a barrel, according to ING analysts. Meanwhile, OPEC+ postponed a review of oil production quotas for 2027 due to disruptions caused by the war with Iran. Ukrainian President Volodymyr Zelenskyy also announced plans to intensify attacks on Russian oil refineries.