Oil falls amid rising crude exports from the Middle East and G7 inventory draws - Sarmad
Oil prices fell on Monday, as rising crude exports from the Middle East and drawdowns from oil inventories in Group of Seven countries added to supplies, offsetting concerns about further damage to Gulf oil infrastructure amid the US-Israeli war on Iran.
Brent crude futures fell 66 cents, or 0.65 percent, to $101.59 a barrel by 0240 GMT, while US West Texas Intermediate crude dropped 95 cents, or 1.03 percent, to $90.12 a barrel.
Brent gave up most of last week’s gains, while WTI fell 1.6 percent after G7 countries agreed on Friday to draw 100 million barrels of diesel and crude from emergency reserves and pledged to refrain from imposing restrictions on energy exports following pressure from US President Donald Trump.
Drawdowns from reserves will add to Middle East crude exports, which rose above pre-war levels in four of the seven days during the last week of September, according to shipping data released on Monday, despite attacks on ships transiting the Strait of Hormuz.
Tim Waterer, an analyst at KCM Trade, said, “The G7’s decision to draw from strategic reserves eases some immediate supply-related price concerns, while there is growing belief that Saudi export volumes are returning to pre-war levels, even if these barrels are still moving at higher costs and via less efficient routes.”
He added, “This combination is enough to curb prices in the short term, although the risk of further damage to Gulf energy infrastructure has not disappeared.”
The Houthis said they launched ballistic missiles and drones at Saudi Aramco facilities in Riyadh and the Khurais area in Saudi Arabia, in response to 50 Saudi-led air and missile strikes in Yemen over the past 12 hours. Saudi Arabia did not immediately confirm the attacks.
The internationally recognized, Saudi-backed Yemeni government said on Sunday that it was launching a major military campaign to regain all areas of the country controlled by Iran-aligned Houthis. Meanwhile, Aramco unexpectedly cut its November crude oil price for Asia to a six-year low.
Analysts at ING said in a note that Brent prices remain above $100 a barrel due to ongoing geopolitical tensions and increasing attacks on commercial shipping in the Gulf.
Two informed sources said OPEC+ postponed a review that would have set oil production quotas for its members in 2027, after the war on Iran disrupted projects to expand production capacity across the Middle East, casting uncertainty over future production potential estimates.
In Europe, Ukrainian President Volodymyr Zelensky told Reuters in an interview published on Saturday that Ukraine would intensify its attacks on Russian oil refineries.
