WTI Drops Below $90 as OPEC+ Maintains November Production Targets
WTI crude oil prices extended their decline to near $89.00 on Monday after OPEC+ decided to maintain its November production targets unchanged, as expected by markets. The decision came amid ongoing export disruptions in the Middle East, particularly around the Bab el-Mandeb strait, which has been controlled by Houthi forces. This critical maritime passage has been a key alternative route for Saudi oil shipments seeking to avoid the Strait of Hormuz, adding to regional supply pressures.
In response to global supply concerns, the G7 nations agreed to release 100 million barrels of crude and diesel from emergency reserves. This move aims to ease market tensions following pressure from US President Donald Trump, who urged against energy export restrictions. Despite the conflict, regional crude exports briefly spiked above pre-war levels in late September, reaching up to 22.5 million barrels per day, according to data from Kpler.
Analysts at Rabobank noted that Brent crude prices have retreated as improved flows through the Strait of Hormuz and the partial restoration of Saudi Arabia’s East-West pipeline eased supply concerns. However, they cautioned that geopolitical risks remain a significant factor, with the deployment of another aircraft carrier to the Middle East threatening to disrupt the recent recovery in oil markets.
The overall exports from key producers, including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman, continue to run well below their designated quotas due to the conflict involving the US, Israel, and Iran. This has contributed to the ongoing volatility in oil prices, with WTI trading around $89.30 during Asian hours on Monday.