Oil Prices Steady Amid Middle East Supply and G7 Stockpile Plans
Oil prices remained relatively stable on Tuesday, following a recovery from earlier losses. The market is carefully balancing concerns over supply disruptions against increased crude exports from the Middle East and plans by the Group of Seven (G7) to release emergency diesel and crude stockpiles. Brent futures were down 29 cents, or 0.3%, at $100.03 a barrel, while US West Texas Intermediate (WTI) crude rose 16 cents, or 0.2%, to $89.59. Analyst John Evans of oil broker PVM noted that the assumption of more crude getting through has dampened price fervor.
Recent data indicates that around 12 million barrels per day of crude oil and 2 million bpd of refined products have left the Middle East on tankers over the last seven to ten days. Saudi Energy Minister Prince Abdulaziz bin Salman reported that oil pumped through the East-West Pipeline had reached 5.8 million barrels as of Tuesday morning. Despite these increases, price declines have been limited by the possibility of further supply disruptions due to escalating hostilities between Saudi Arabia and Yemen’s Iran-backed Houthis.
The International Energy Agency is set to meet next week to finalize details of a diesel stock release, amid growing market confusion over the volumes Europe and the US plan to make available. The surge in diesel prices has become a global political and economic concern, driven by disruptions caused by the wars in Iran and Ukraine. The G7 agreed to release 100 million barrels of diesel and crude oil from emergency reserves but did not provide a breakdown of the volumes or participating countries.
The US Energy Information Administration (EIA) projected that world petroleum production would drop from a record 106.3 million bpd in 2025 to 101.1 million bpd in 2026, with oil demand also declining. However, the EIA expects both supply and demand to rise back to record highs by 2027. In the US, the oil market is awaiting weekly storage reports from the American Petroleum Institute and the EIA, with analysts estimating a 1.8 million barrel increase in US crude storage during the week ended October 2.