Oil Prices Fall 2% as Middle East Exports Rise

By Adedapo Adesanya

Oil prices lost about $2 on Monday after crude exports from the Middle ​East increased and the Group of Seven nations pledged to boost supplies.

Brent crude futures gave up $1.93 or 1.89 per cent to settle at $100.32 a barrel, while US West Texas Intermediate (WTI) crude lost $1.68 or 1.84 per cent to close at $89.43 per barrel.

Middle Eastern crude exports rose above pre-war levels in four of the seven days of the final week of September, shipping data showed ​on Monday, despite attacks on vessels passing through the Strait of Hormuz.

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.

Market analysts noted that it is unclear how much of the oil pledged under the new agreement would come from the remaining volumes of the International Energy Agency-coordinated 400 million-barrel emergency release announced in March.

Last week, the Executive Director of the IEA, Mr Fatih Birol, said that members had released about two-thirds of the 400-million-barrel ​agreement.

Meanwhile, the geopolitical risk premium remains at an elevated level following renewed hostilities between Saudi Arabia and the Iran-backed ‌Houthis, with the latter attacking energy infrastructure and vessels.

Houthis over the weekend claimed a missile and drone attack on a facility of Saudi Aramco in Riyadh, the Saudi capital city. However, the Saudi-led coalition supporting Yemen’s internationally recognised government said that the Houthi claim is “misleading”.

Yemeni government forces attacked Houthi positions in the Dhubab district overlooking ​the strategic Bab ⁠el-Mandeb Strait on Monday.

The Organisation of the Petroleum Exporting Countries (OPEC+) agreed on Sunday to keep its oil production quota for next month unchanged from this one, in line with expectations, after it unwound its production cuts earlier this year in a bid to offset the deepening supply shortage from the Middle East.

The total for October and November stands at 31.01 million barrels per day for the eight OPEC+ members covered by the quota. However, in August the group only produced 25 million barrels daily, which was well below its own quota.

Amid this, Reuters reported that the group delayed a review that would determine 2027 oil output quotas for its members after the Iran war disrupted projects to expand capacity across the ⁠Middle East, ​throwing estimates of future production potential into uncertainty.