Oil Prices Drop as Middle East Exports Rise and G7 Releases Emergency Stocks
Oil prices dropped during Asian trading on Monday as concerns over supply shortages eased slightly. The decline came amid rising crude exports from the Middle East and the Group of Seven's decision to release emergency oil stocks. As of 21:51 ET (01:51 GMT), Brent futures for December delivery fell 0.7% to $101.58 per barrel, while WTI futures for November slipped 1.1% to $90.14 per barrel.
The G7 nations agreed on Friday to release 100 million barrels of crude and fuel products from emergency reserves, with a significant portion of diesel expected within 20 days. This move aims to mitigate supply disruptions caused by the ongoing war involving Iran. Meanwhile, Middle Eastern crude exports surpassed pre-war levels on four days in late September, according to reports citing Kpler data. Exports ranged between 19.5 million and 22.5 million barrels per day, with a seven-day moving average of 18.5 million bpd on October 1, up from the pre-war average of 18 million bpd.
The recovery in exports has been facilitated by increased flows through the Strait of Hormuz and alternative routes, despite ongoing risks to shipping. The region's supply outlook remains uncertain due to continued attacks, such as those claimed by Yemen's Iran-aligned Houthis on Saudi Aramco facilities. Saudi Aramco also cut its November Arab Light official selling price to Asia by $3 a barrel, the widest discount since June 2020, to defend market share amid higher freight costs.
Adding to the market's complexity, OPEC+ decided to keep November production targets unchanged. The group announced its next meeting will be held on November 1.