Oil prices drop as Middle East exports rise and G7 taps reserves

Oil prices declined in Asian trading on Monday as rising crude exports from the Middle East and the G7's plan to release emergency oil stocks eased some supply concerns. Despite the drop, geopolitical tensions in the region limited further losses. As of 21:51 ET (01:51 GMT), December futures for Brent crude fell 0.7% to $101.58 per barrel, while November futures for West Texas Intermediate (WTI) slipped 1.1% to $90.14 per barrel.

The G7 agreed on Friday to release 100 million barrels of crude and fuel products from emergency reserves, with a significant portion of diesel to be released within 20 days. This move aims to cushion energy markets from supply disruptions caused by the ongoing war involving Iran.

Meanwhile, Middle Eastern crude exports surpassed pre-war levels on four days during the final week of September, according to reports citing Kpler data. Exports ranged between 19.5 million and 22.5 million barrels per day from Sept. 24 to Sept. 29, with a seven-day moving average of 18.5 million bpd on Oct. 1, above the pre-war average of 18 million bpd. The recovery in exports has been aided by increased flows through the Strait of Hormuz and alternative routes, despite ongoing shipping risks.

Geopolitical tensions continued to complicate the supply picture, with Yemen’s Iran-aligned Houthis claiming to have launched missiles and drones at Saudi Aramco facilities. Saudi Arabia has not confirmed these attacks. Additionally, Saudi Aramco unexpectedly cut its November Arab Light official selling price to Asia by $3 a barrel to a discount of $5 to the Oman-Dubai average, seeking to defend market share amid higher freight costs. OPEC+ also agreed to keep November production targets unchanged, with its next meeting scheduled for Nov. 1.