Brent crude oil prices fell by 0.5% in futures trading to $101.7 per barrel. At the same time, West Texas Intermediate crude oil prices in the U.S. decreased by 1% to $90.20. These developments in the oil market are due to the increase in crude oil exports from the Middle East and the decrease in oil reserves of G7 countries.
Increase in Crude Oil Exports from the Middle East
According to shipping data, crude oil exports in the last week of September exceeded pre-war levels on 4 out of 7 days. This increase in exports indicates a return to levels close to those before the Saudi war, despite higher transportation costs and the use of less efficient routes.
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Tim Water, an analyst at KCM Trade, stated that the G7's decision to draw about 100 million barrels of diesel and crude oil from emergency reserves "alleviates some immediate supply concerns." However, he warned that the risk of further damage to energy infrastructure in the Gulf region has not been eliminated.
Geopolitical Tensions Impacting Prices
The Houthi group, Ansar Allah, has announced that it has targeted Saudi Aramco sites in Riyadh. In this context, the internationally recognized Yemeni government announced the launch of a major military operation to retake areas controlled by this group.
Unexpectedly, Aramco reduced its crude oil prices for November in Asia to the lowest level in six years. Analysts at ING believe that Brent crude oil prices will remain above $100 due to ongoing geopolitical tensions and increased attacks on commercial ships in the Gulf.
Two informed sources stated that OPEC+ has postponed the review of its members' production quotas for 2027, as the war with Iran has disrupted capacity expansion projects across the Middle East and increased uncertainty regarding estimates of future production potential.
Ultimately, Brent crude oil prices remain above $100 due to geopolitical tensions and attacks on commercial ships in the Gulf, while prices fluctuate due to changes in supply and demand.
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