Oil Prices Swing as G7 Releases Emergency Stocks and Middle East Exports Rise
Oil prices fluctuated on Monday as markets reacted to two major developments: a rise in Middle Eastern crude exports and the G7's plan to tap emergency oil reserves. The moves eased some immediate supply concerns, though geopolitical tensions in the region kept risks elevated. By 05:19 ET (09:19 GMT), December Brent crude futures climbed 0.3% to $102.52 per barrel, while November West Texas Intermediate (WTI) futures dipped 0.4% to $90.71 per barrel.
The Group of Seven nations agreed on Friday to release 100 million barrels of crude and fuel products from emergency reserves, with a significant portion of diesel expected within 20 days. The decision aimed to mitigate supply disruptions caused by the Iran war. Analysts at ING noted that this action reflects growing tightness in the diesel market as winter approaches, adding that the move has led President Trump to rule out a U.S. diesel export ban.
Meanwhile, Middle Eastern crude exports surpassed pre-war levels on four days in late September, according to reports citing Kpler data. Exports ranged between 19.5 million and 22.5 million barrels per day on September 24 and between September 27 and 29, with a seven-day moving average of 18.5 million bpd on October 1, above the pre-war average of 18 million bpd. The recovery was aided by increased flows through the Strait of Hormuz and alternative export routes, though risks remain for vessels exiting the Gulf.
Supply concerns were further complicated by escalating violence in the region. Yemen’s Iran-aligned Houthis claimed to have launched missiles and drones at Saudi Aramco facilities in Riyadh and the Khurais area in retaliation for Saudi-led strikes in Yemen. Saudi Arabia has not confirmed these attacks. Additionally, Saudi Aramco unexpectedly cut its November Arab Light official selling price to Asia by $3 a barrel to a discount of $5 to the Oman-Dubai average, the widest discount since June 2020, as it seeks to defend market share amid higher freight costs. OPEC+ also agreed to keep November production targets unchanged, with its next meeting scheduled for November 1.