Oil slips as Middle East crude exports rise, G7 to release stocks

Oil prices declined on Monday due to increased Middle East crude exports and a release of oil stocks by the Group of Seven nations, despite ongoing worries over additional harm to Gulf oil infrastructure following the Iran conflict. Brent crude futures dropped 35 cents, or 0.34%, to $101.90 a barrel, while US West Texas Intermediate crude decreased by 62 cents, or 0.68%, to $90.49 a barrel.

Brent shed most of its gains from the previous week, while WTI was 1.6% lower following G7 nations' decision to release 100 million barrels of diesel and crude from emergency reserves on Friday. The release will contribute to the already elevated levels of Middle Eastern crude exports, which surpassed pre-war levels for four out of the seven days in the final week of September, according to shipping data. However, attacks on vessels passing through the Strait of Hormuz persist.

The G7's decision to tap strategic reserves has somewhat alleviated immediate supply concerns for oil prices, while there is a growing belief that Saudi export volumes are approaching pre-war levels, even if those barrels are still shipped at higher costs and through less efficient routes. Tim Waterer, chief analyst at KCM Trade, explained that the combination of factors is sufficient to depress prices temporarily, despite the risks of further damage to energy infrastructure in the Gulf region remaining.

Houthi rebels claimed responsibility for launching ballistic missiles and drones at Saudi Aramco facilities in Riyadh and the Khurais area of Saudi Arabia as retaliation to 50 Saudi-led air and missile strikes in Yemen in the past 12 hours. Saudi Arabia has not confirmed these allegations. On Sunday, Yemen's Saudi-backed, internationally recognized government announced a major military operation to reclaim all areas of the country controlled by the Houthis.

Aramco unexpectedly reduced November crude oil prices for Asia to six-year lows on Sunday. OPEC+ postponed a review of 2027 oil output quotas for its members due to the US-Israeli war on Iran, which halted projects to expand capacity across the Middle East and created uncertainty about future production potential. In Europe, Ukrainian President Volodymyr Zelenskiy stated that Ukraine would intensify attacks on Russian oil refineries in an interview with Reuters published on Saturday.