Oil prices fall amid rising exports from the Middle East and the G7 decision
Kyiv • UNN
Brent and WTI prices declined due to increased exports and the G7 decision to release oil from reserves. Geopolitical risks remain.
Oil prices fell on Monday, October 5, as rising oil exports from the Middle East and the release of oil reserves by G7 countries increased supply, offsetting concerns about further damage to oil infrastructure in the Persian Gulf as the U.S.-Israeli war against Iran drags on. UNN reports, citing Reuters.
Details
Brent crude futures fell 72 cents, or 0.71%, to $101.59 per barrel at 06:34 GMT (09:34 Kyiv time), while the price of U.S. West Texas Intermediate crude stood at $90.05 per barrel, down $1.05, or 1.2%.
The price of Brent crude lost most of its gains last week, while WTI fell 1.6% after G7 countries agreed on Friday to release 100 million barrels of diesel fuel and oil from emergency reserves and pledged to refrain from restricting energy exports under pressure from U.S. President Donald Trump.
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According to shipping data, as of Monday, this release will increase oil exports from the Middle East, which exceeded pre-war levels on four of the seven days in the last week of September despite attacks on vessels passing through the Strait of Hormuz.
ICE gasoil futures rose more than 2% to $1,390.25 per barrel on Monday.
Experts' opinion
"The G7 decision to use strategic reserves partially removes the immediate supply anxiety from the price, while the view is growing that Saudi Arabia's export volumes are returning to pre-war levels, even if those barrels are still being transported at higher costs and via less efficient routes," said Tim Waterer, chief analyst at KCM Trade.
"This combination is enough to contain prices for now, even if the risks of further damage to energy infrastructure in the Persian Gulf region have not disappeared," he noted.
The Houthis said they had launched ballistic missiles and drones at Saudi Aramco facilities in Riyadh and the Khurais area of Saudi Arabia in response to 50 Saudi-led air and missile strikes in Yemen over the past 12 hours. There was no confirmation from Saudi Arabia.
On Sunday, the Saudi-backed and internationally recognized Yemeni government said it was launching a large-scale military campaign to retake all areas of the country controlled by the Iran-backed Houthis. Meanwhile, Aramco unexpectedly cut November oil prices for Asia to a six-year low.
Brent prices continue to remain above $100 per barrel amid persistent geopolitical tensions and an increase in attacks on commercial vessels in the Persian Gulf, according to a note from ING analysts.
Meanwhile, OPEC+ postponed a review that was supposed to determine oil production quotas for its members for 2027 after the war with Iran disrupted capacity expansion projects in the Middle East, casting doubt on estimates of future production potential, two sources close to the matter said.
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