Oil Prices Near $100 Amid Middle East Supply Risks and Attacks

Oil prices stayed close to the $100 mark on Tuesday as Middle Eastern exports maintained steady levels, easing some immediate supply fears. However, ongoing attacks in the region kept concerns about potential disruptions to Gulf shipments alive. Brent crude rose to $100.60 a barrel, up 0.24%, while West Texas Intermediate (WTI) climbed to $89.60, gaining 0.19%. Both benchmarks had slightly retreated from recent highs near $103 after data showed Middle Eastern crude exports surpassed pre-war levels on multiple days in late September.

The supply outlook improved slightly after G7 nations agreed to release 100 million barrels of diesel and crude from emergency reserves, pledging not to restrict energy exports. Despite stronger oil flows, worries about future supplies persisted due to continued attacks and uncertainty around Gulf shipments. Yemen’s Iran-backed Houthis claimed responsibility for strikes on Saudi Arabia, including key sites like King Khalid International Airport and an Aramco refinery, though Saudi Arabia had not confirmed the attacks.

Longer-term supply concerns remained due to shipping bottlenecks, refinery output cuts, and withdrawals from global inventories. The Strait of Hormuz has been a flashpoint for disruptions since the US-Israeli conflict with Iran began in February, with attacks on infrastructure further affecting production and exports. Global oil stockpiles have been significantly depleted, with around 3 billion barrels lost since the conflict started and 1 billion withdrawn from inventories.

The disruption could delay the recovery in global oil demand until 2028 or 2029, following this year’s decline. The longer-term floor for WTI could rise to around $70 a barrel, compared with a mid-cycle price of $65, $70. If prices remain strong, US oil production could exceed 14 million to 14.5 million barrels per day.