Oil Prices Steady Amid Middle East Exports and G7 Supply Release
Oil prices showed slight gains in a volatile trading session on Monday, supported by higher crude exports from the Middle East and the G7's plan to release additional supplies. Brent crude futures rose by 16 cents to $102.41 per barrel, while US West Texas Intermediate (WTI) crude fell by 90 cents to $90.21. The G7's announcement to release 100 million barrels of diesel and crude over the next four months provided short-term relief but did little to address structural constraints in refined products, according to Saxo Bank analyst Ole Hansen.
Middle Eastern crude exports rebounded above prewar levels in the final week of September, despite ongoing attacks on vessels in the Strait of Hormuz. However, geopolitical tensions persisted, with the Houthis launching ballistic missiles and drones at Saudi Aramco sites in response to Saudi-led strikes in Yemen. PVM Oil Associate analyst Tamas Varga noted that the risk premium remained elevated due to continued hostilities.
Saudi Aramco's CEO, Amin Nasser, warned that crude and refined fuel supplies would remain tight, with global stockpiles potentially taking two years to replenish after emergency withdrawals. The G7's release agreement's details, including how much would come from the previous March pact of 400 million barrels, remained unclear. Meanwhile, Ukraine's President Volodymyr Zelenskiy indicated that attacks on Russian oil refineries would continue, potentially worsening the supply crunch.
OPEC+ postponed a review of 2027 oil output quotas due to disruptions caused by the Iran war, further complicating future production estimates. Aramco also unexpectedly cut November crude oil prices for Asia to six-year lows, adding to market uncertainties.