Oil Prices Steady Amid Middle East Exports and Supply Concerns
Oil prices remained relatively steady on Tuesday, recovering from earlier declines as traders balanced increasing Middle Eastern crude exports against ongoing supply risks. Brent futures rose by 26 cents to settle at $100.58 per barrel, while US West Texas Intermediate (WTI) crude edged up by one cent to $89.44. The CEO of Vitol reported that around 12 million barrels per day of crude oil and 2 million bpd of refined products had recently left the Middle East, contributing to market stability.
However, concerns about potential supply disruptions limited further price declines. Saudi Arabia’s airports in Jazan and Najran were targeted in attacks by Yemen’s Iran-backed Houthis, escalating tensions in the region. Meanwhile, Saudi-backed Yemeni forces launched a major offensive to retake territory from the Houthis, with Riyadh increasing airstrikes in support. Additionally, Ukrainian President Volodymyr Zelenskiy warned of a possible massive Russian attack, which could further impact global energy markets.
In response to rising diesel prices, the Group of Seven (G7) agreed to release 100 million barrels of diesel and crude oil from emergency reserves. The International Energy Agency is set to meet next week to finalize details of this diesel stock release, amid confusion over how many barrels Europe and the US plan to make available. The surge in diesel prices has become a significant global concern, driven by disruptions caused by the wars in Iran and Ukraine, which have curbed exports and damaged refineries.
The US Energy Information Administration projected that world petroleum production would drop from 106.3 million bpd in 2025 to 101.1 million bpd in 2026, with oil demand also decreasing. However, the EIA expects both supply and demand to rebound to record highs by 2027. In the US, analysts estimated that energy firms added 1.7 million barrels of crude to storage during the week ended October 2, marking the first time since August that crude stocks increased for three consecutive weeks.