Oil Prices Swing as Middle East Exports Recover and G7 Releases Emergency Stocks
Oil prices saw volatility on Monday as rising exports from the Middle East and the Group of Seven's (G7) plan to tap emergency oil reserves helped ease some supply concerns, despite ongoing geopolitical tensions.
As of 05:19 ET (09:19 GMT), Brent crude for December delivery rose 0.3% to $102.52 per barrel, while West Texas Intermediate (WTI) for November slipped 0.4% to $90.71 per barrel.
The G7 agreed on Friday to release 100 million barrels of crude and fuel products from emergency reserves, with a significant portion of diesel expected to be released within 20 days. This move aims to mitigate supply disruptions caused by the Iran war. Analysts from ING noted that the G7 action reflects growing tightness in the diesel market as winter approaches in the Northern Hemisphere, and it also rules out the possibility of a U.S. diesel export ban.
Meanwhile, Middle Eastern crude exports surpassed pre-war levels on four days during the final week of September, according to reports citing Kpler data. Exports reached 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 has been aided by increased flows through the Strait of Hormuz and alternative export routes, though vessels still face risks exiting the Gulf.
The supply picture remains complex due to spreading 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 response to 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+ agreed to keep November production targets unchanged, with its next meeting scheduled for November 1.