Oil Prices Stabilize as West Asia Exports Rise and Saudi Aramco Cuts Prices

Oil prices steadied on Tuesday, October 6, after a slight dip on Monday. The market showed signs of easing as exports from West Asia rebounded and Saudi Aramco reduced its oil prices. Brent crude, the global benchmark, traded at $100.55 during early Asian hours, while West Texas Intermediate (WTI) held above $89, with the November contract slipping 0.2% to $89.26. Brent had earlier surged past $102 on Monday before retreating.

Supply disruptions remained a key factor, as Gulf producers increased shipments through the Strait of Hormuz despite ongoing risks. Kuwait reported pumping about 75% of its pre-war output, and Iraq sought additional vessels to transport its cargoes. Saudi Aramco further pressured prices by cutting the cost of its Arab Light grade for Asian buyers to a six-year low, aiming to secure market share. Despite these movements, Brent prices remained 65% higher than at the start of the year.

The conflict between the US, Israel, and Iran in February had initially disrupted supplies and fueled inflation. While crude flows from West Asia have since recovered, shipments of refined products remain limited due to Ukrainian strikes on Russian facilities. The WTI prompt spread, which measures the gap between its two nearest contracts, also indicated easing tightness, narrowing to $1.28 a barrel from $4.69 two weeks earlier.

In Yemen, government forces, backed by a Saudi-led coalition, recaptured the Red Sea port of Mocha from the Iran-backed Houthis. The Houthis had controlled the port since early September, using it to tighten their grip on the Bab Al Mandeb Strait. Saudi Arabia had relied on this chokepoint to export oil and bypass the Strait of Hormuz amid the US-Iran conflict. Traders also awaited the US Energy Information Administration's Short-Term Energy Outlook, set to be released later on Tuesday, which will include forecasts for fuel demand during the Northern Hemisphere winter.