Oil Prices Waver Amid Middle East Export Recovery and G7 Reserve Release
Oil prices showed little clear direction on Monday as market forces pulled in opposite directions. Middle East crude exports rebounded, and the Group of Seven (G7) nations announced plans to release 100 million barrels from emergency reserves. These moves eased some supply concerns that had kept prices elevated. Brent crude oil rose five cents to $102.30 per barrel, while U.S. West Texas Intermediate (WTI) crude fell 49 cents to $90.62 per barrel.
Despite the improving supply picture, geopolitical risks remained a significant factor. Crude exports from the Middle East surpassed pre-war levels in late September, with a seven-day moving average reaching 18.3 million barrels per day. However, attacks on vessels in the Strait of Hormuz continued, with seven incidents reported in the past week, including strikes on two tankers. Tensions between Saudi Arabia and Iran-aligned Houthi forces also escalated after the Houthis claimed attacks on Saudi Aramco facilities.
The market faced an unusual dynamic where crude supply was improving while refined petroleum products remained in short supply. ICE gasoil futures surged over four percent to $1,409 per metric tonne as China's suspension of petroleum-product exports tightened Asian supplies. Meanwhile, Saudi Arabia unexpectedly cut the official selling price of its Arab Light crude to Asian customers for November, setting it at a $5 per barrel discount to the Oman/Dubai benchmark average.
The outlook for oil prices hinges on whether the recovery in Middle East exports and emergency stock releases can offset ongoing security risks. For oil-importing countries like Nigeria, a sustained decline in crude prices could lower the cost of imported petroleum products but also reduce government revenue and foreign-exchange earnings.