Oil prices decline amid rising Middle East supply and G7 reserve decision
The G7 countries' release of emergency reserves to the market and increased crude oil exports from the Middle East caused oil prices to fall in global markets.
The decision by G7 countries to release emergency reserves and increased crude oil exports from the Middle East caused a drop in oil prices on Monday.
Decline in Oil Prices
Brent crude futures fell 0.65% to $101.59 a barrel. Meanwhile, the price of US West Texas Intermediate (WTI) crude dropped 95 cents, or 1.03%, to $90.12 a barrel.
While Brent gave up most of its gains from the previous week, WTI retreated by 1.6%.
G7 Countries' Reserve Move
G7 countries agreed on Friday to release 100 million barrels of diesel and crude oil from emergency reserves into the market.
These countries also pledged to avoid restrictions on energy exports following pressure from US President Donald Trump.
Middle East Supply and Shipments
Shipment data published on Monday clearly showed that crude oil exports from the Middle East, alongside the reserve sales, also boosted supply.
Exports from the region rose above pre-war levels on four out of seven days in the final week of September, despite attacks on vessels passing through the Strait of Hormuz.
Market Analysts' Evaluations
KCM Trade Chief Analyst Tim Waterer stated that the G7's decision to use strategic reserves has reduced the impact of short-term supply concerns on prices.
Waterer noted that views strengthening Saudi Arabia's export volumes are returning toward pre-war levels.
Regional Security and Attacks
The Houthis announced they carried out attacks on Saudi Aramco facilities in Riyadh and Khurais in response to Saudi-led air and missile strikes in Yemen.
The Saudi-backed Yemeni government launched a comprehensive military operation on Sunday aimed at reclaiming all areas controlled by the Iran-backed Houthis.
Aramco Prices and OPEC+
Aramco unexpectedly lowered its November crude oil prices for Asia, bringing them to their lowest level in six years.
OPEC+ members, meanwhile, postponed their assessment to determine 2027 oil production quotas following ongoing geopolitical developments.