Oil Prices Steady as Middle East Exports Rise and Supply Risks Persist

Oil prices remained stable on Tuesday after initially losing ground, as traders balanced rising crude exports from the Middle East against persistent supply risks. Brent futures fell 29 cents, or 0.3%, to $100.03 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 16 cents, or 0.2%, to $89.59. Analysts noted that the potential for increased oil flow into the market has tempered price increases, with John Evans of PVM stating that Brent's trading near $100 per barrel reflects a shift in supply expectations.

The market has seen a significant surge in Middle Eastern oil shipments, with around 12 million barrels per day of crude and 2 million bpd of refined products leaving the region over the past week, according to Vitol CEO. Saudi Arabia's East-West Pipeline also reported a throughput of 5.8 million barrels on Tuesday. However, concerns over supply disruptions continue to limit price declines, particularly after recent attacks on Saudi airports by Yemen's Iran-backed Houthis.

Geopolitical tensions remain a key factor, with Saudi-backed forces launching a major offensive against the Houthis. Meanwhile, the Group of Seven (G7) is set to release 100 million barrels of diesel and crude from emergency reserves to address shortages and high prices, though details on the breakdown remain unclear. The International Energy Agency will discuss the diesel stock release next week amid growing market confusion.

The U.S. Energy Information Administration (EIA) projected a drop in global oil production from 106.3 million bpd in 2025 to 101.1 million bpd in 2026, with demand also decreasing from 104.4 million bpd to 102.4 million bpd. However, the EIA expects both supply and demand to rebound to record highs in 2027.