Oil prices stabilize amid Middle East exports and G7 supply release plan

Oil prices showed slight gains on Monday amid volatile trading, supported by rising crude exports from the Middle East and the G7's plan to release additional supplies. Brent crude futures climbed 5 cents to $102.30 per barrel, while US West Texas Intermediate (WTI) crude fell 49 cents to $90.62. Earlier in the session, both contracts dropped over 1%, reversing some of last week's gains after the G7 agreed to release 100 million barrels of diesel and crude from emergency reserves.

The supply backdrop remains tight, with ICE gasoil futures surging more than 4% to $1,409 per metric ton. PVM Oil Associate analyst Tamas Varga attributed this to suspended Chinese product exports, tightening refined product supplies in the Far East. Geopolitical tensions continue to elevate the risk premium, as a truce in the Middle East remains elusive and attacks on energy infrastructure persist.

Saudi Aramco's CEO Amin Nasser warned that crude and refined fuel supplies are likely to remain stretched, with global stockpiles taking up to two years to refill after emergency withdrawals. Meanwhile, OPEC+ delayed a review of 2027 oil output quotas due to uncertainty caused by the Iran war. Additionally, Aramco unexpectedly cut November crude oil prices for Asia to six-year lows, potentially exacerbating refined product shortages.

Yemeni government forces launched attacks on Houthi positions near the strategic Bab el-Mandeb strait, while the Houthis claimed missile and drone strikes on Saudi Aramco sites. Ukraine's President Zelenskiy also hinted at continued attacks on Russian oil refineries, further complicating the supply landscape.