Oil prices fall as strong Middle Eastern exports and G7 reserves ease supply fears

Crude oil markets saw downward pressure as traders balanced resilient Middle Eastern shipments and a major international emergency reserve release against ongoing security threats across the Gulf.

According to Cnbc, Brent crude futures lost 2.3% to $97.99 a barrel by 7:46 a.m. ET, while US West Texas Intermediate crude futures also fell 2.3% to $87.33 a barrel. Meanwhile, Finance reported that benchmark Brent crude fell by 0.2% to $100.17 a barrel and U.S. WTI fell by 0.8% to $88.67 a barrel at 04:12 ET. The Daily Star noted that Brent was down 83 cents at $99.49 a barrel around 0650 GMT, while WTI fell $1 to $88.43 a barrel.

Oil is little changed after yesterday's decline as traders continue to digest a modest easing in supply-side anxiety, said KCM Trade chief analyst Tim Waterer, as reported by CNBC. Waterer added that the pickup in Saudi export numbers and the G7 decision to release strategic reserves are helping keep a lid on prices for now, even while Brent remains anchored around the $100 level.

Shipping data cited by CNBC indicated that crude exports from the Middle East exceeded pre-war levels on four days during the final week of September. Finance, citing Kpler data via Reuters, stated that the seven-day moving average for crude exports stood at 18.3 million barrels per day on September 30, with volumes surpassing pre-war levels for 14 days in September. The Daily Star noted that Gulf oil flows excluding Iran surged to over 81 percent of pre-war levels in September, aided by alternative routes and logistical adjustments.

Shipping data shows regional crude exports actually exceeded pre-war levels on several days in late September. Alternative routes and logistical adjustments have somehow allowed producers to keep barrels moving despite the disruption around Hormuz, said Priyanka Sachdeva, head of market insights at Phillip Nova, via The Daily Star.

Supply dynamics varied across producers. According to analysts at ING cited by The Daily Star and Finance, Kuwait stated it was producing at 75 percent of pre-war levels, while Saudi Arabia cut the official selling price of its Arab Light into Asia for November loadings. At the same time, Iranian exports fell to zero due to a US blockade.

Geopolitical risks continued to buffet the market. Iran had previously moved to all but shutter the Strait of Hormuz, cutting off a vital transit route for global oil and liquefied natural gas. The conflict subsequently expanded to Yemen, where Houthi militants and Saudi-aligned government forces vied for control over the Bab el-Mandeb Strait. The Daily Star reported that Saudi-backed Yemeni forces staged a lightning advance on Monday to retake the coast around the strait up to the city of Mocha.

In response, Yemen's Houthis stated on Monday that they carried out attacks on several sites in Saudi Arabia, including King Khalid International Airport in Riyadh, an Aramco refinery in Rabigh, and Abha airport, though there was no immediate Saudi confirmation according to CNBC and The Daily Star. Additionally, ING analysts noted that media reports on Monday indicated the Saudi east-west pipeline was targeted again without being disrupted, serving as a reminder that flows remain at risk.

While crude exports adapted, Finance noted via The Wall Street Journal and Kpler data that cargoes of oil products like gasoline and diesel remain muted due in part to damaged regional refineries. This kept supplies tight, pushing up the global prices of these critical fuel sources.

To calm markets, G7 countries agreed on Friday to release 100 million barrels of diesel and crude from emergency reserves and pledged to refrain from energy export restrictions after pressure from US President Donald Trump, as detailed by CNBC, Finance, and The Daily Star.